Company Reports

Telecom Italia reported second-quarter adjusted service revenue growth of 2% and adjusted EBITDA after leases growth of 4.5%. Management confirmed guidance for 2026 and 2027. That said, performance remained uneven across divisions.

Telecom Italia is the incumbent telecom operator in the Italian market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual network operators own almost 30% of the mobile market, bringing constant pressure to larger operators like TIM and Vodafone. The Italian mobile market offers one of the lowest average revenue per user in Europe, with monthly prices of around EUR 10 and some MVNOs offering monthly plans for EUR 5 or less.

Telecom Italia is the incumbent telecom operator in the Italian market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators, or MVNOs, own almost 30% of the mobile market, bringing constant pressure to larger operators like TIM and Vodafone. The Italian mobile market offers one of the lowest average revenue per user in Europe, with monthly prices of around EUR 10, with some MVNOs offering monthly plans for EUR 5 or less.

Telecom Italia, or TIM, is the incumbent telecom operator in the Italian market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators, or MVNOs, own almost 30% of the mobile market, bringing constant pressure to larger operators like TIM and Vodafone. The Italian mobile market offers one of the lowest average revenue per user in Europe, with monthly prices of around EUR 10, with some MVNOs offering monthly plans for EUR 5 or less.

Telecom Italia reported adjusted service revenue growth of 3.1% and adjusted EBITDAaL growth of 4.1% in the first quarter, putting the firm on track to reach 2026 guidance.

Poste Italiane’s offer to Telecom Italia shareholders at an implied price of EUR 0.635 per share looks accretive for shareholders, and a 63% premium to our previous EUR 0.39 fair value estimate. Poste Italiane has offered EUR 0.167 in cash plus 0.0218 Poste Italian shares per Telecom Italia share.

Telecom Italia, or TIM, is the incumbent in the extremely competitive Italian telecommunications market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators own almost 30% of the mobile market, and players like TIM and Vodafone have seen their top lines decline substantially, pressured by customer losses and lower pricing. Average revenue per user is one of the lowest in Europe, and once market stability is broken, prices never recover.

Telecom Italia's fourth-quarter 2025 results and guidance show the firm continues to execute with discipline amid a challenging consumer environment. Management guided for 5%-6% EBITDA after leases growth in 2026, in line with their ambitions in the medium-term plan.

The Morningstar Developed Markets Europe Communication Services Index has returned 23.7% year to date, thanks to renewed hopes for consolidation and modestly improving conditions in markets like Italy.

Telecom Italia reaffirmed its full-year guidance, with group EBITDAaL up 5.3% year to date and an acceleration expected next quarter.

Telecom Italia, or TIM, is the incumbent in the extremely competitive Italian telecommunications market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators own almost 30% of the mobile market, and players like TIM and Vodafone have seen their top lines decline substantially, pressured by customer losses and lower pricing. Average revenue per user is one of the lowest in Europe, and once market stability is broken, prices never recover.

Telecom Italia, or TIM, is the incumbent in the extremely competitive Italian telecommunications market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators own almost 30% of the mobile market, and players like TIM and Vodafone have seen their top lines decline substantially, pressured by customer losses and lower pricing. Average revenue per user is one of the lowest in Europe, and once market stability is broken, prices never recover.

Telecom Italia’s second-quarter results demonstrated stable execution. Group revenue was up 2.7% and EBITDA after leases up 5% to EUR 6.6 billion and EUR 1.7 billion in the first half, respectively.

Telecom Italia's first-quarter results were in line with guidance, with revenue of EUR 3.3 billion and EBITDAaL of EUR 980 million, up 2.7% and 5.4% year on year, respectively.

Telecom Italia, or TIM, is the incumbent in the extremely competitive Italian telecommunications market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators own almost 30% of the mobile market, and players like TIM and Vodafone have seen their top lines decline substantially, pressured by customer losses and lower pricing. Average revenue per user is one of the lowest in Europe, and once market stability is broken, prices never recover.

No-moat Telecom Italia met its 2024 guidance targets, with revenue up 3.1% compared with guidance of 3%-4% and EBITDAaL up 10.1% compared with guidance of 8%-9%. In 2025 and until 2027, management expects growth of 2%-3% for revenue and 7% for EBITDAaL. We view these targets as ambitious, since any turbulence in the highly competitive Italian consumer market could jeopardize them. We are maintaining our EUR 0.25/$2.80 fair value estimate and Very High Uncertainty Rating.

No-moat Telecom Italia reported third-quarter results broadly in line with company-compiled consensus and there were no major surprises. Negative trends continued in the hypercompetitive Italian market, where organic mobile service revenue fell 0.3% year on year to EUR 1.42 billion. In Italy, competitor Illiad continues to take market share as it added 162,000 mobile customers while Telecom Italia lost 69,000 clients in the period. Management reiterated guidance for the year, implying fourth-quarter domestic EBITDA-after-leases growth of over 11% to reach the guided range of 9%-10%. We believe this is ambitious given growth for the first nine months was 8.3%. We maintain our EUR 0.25 fair value estimate and Very High Morningstar Uncertainty Rating.

Telecom Italia, or TIM, is the incumbent in the extremely competitive Italian telecommunications market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators own almost 30% of the mobile market, and players like TIM and Vodafone have seen their top lines decline substantially, pressured by customer losses and lower pricing. Average revenue per user is one of the lowest in Europe, and once market stability is broken, prices never recover.

No-moat Telecom Italia saw shares drop by 7% during the May 30 trading session after reporting first-quarter results. Although revenue and EBITDA after leases were in line with consensus estimates, investors remain worried about Telecom Italia's debt in a hypercompetitive Italian market. Net debt during the quarter rose to EUR 26.6 billion from EUR 25.7 billion at year-end, in large part due to a EUR 250 million provision over alleged fraud. We are maintaining our EUR 0.25 fair value estimate and Very High Morningstar Uncertainty rating.

We are maintaining our EUR 0.25 fair value estimate after Telecom Italia reported its fourth-quarter 2023 results. Group revenue reached EUR 16.3 billion, a 3.1% year-over-year increase. Brazil was the main growth engine with a 10.7% organic increase for the full year. The Italian business grew by a meager 0.6% as the Italian mobile business continued to drag on the group with a 4% organic decline for the full year. Top-line pressure comes from a loss of market share as average revenue per user has remained stable for the past year at around EUR 11 per month. Telecom Italia’s mobile market share decreased to 24.2% in September 2023 compared with 24.9% in September 2022, according to the Italian regulator Agcom, with Iliad and mobile virtual network operators gaining share. Group EBITDA after leases grew by 6.1% organically to EUR 5.3 billion for the full year, aided by strong EBITDAaL growth in Brazil of 19%.