AI assistant
Telecom Italia Rsp — Earnings Release 2016
Feb 6, 2017
4448_rns_2017-02-06_96ed2e9e-aa84-4f1f-9fbe-e332ee5fa8f8.pdf
Earnings Release
Open in viewerOpens in your device viewer
TELECOM ITALIA GROUP
FY'16 Preliminary Results + 2017-'19 Plan February 6, 2017
FY'16 and New Plan: A Transforming Company
Giuseppe Recchi - Flavio Cattaneo – Stefano De Angelis - Piergiorgio Peluso
Safe Harbour
This presentation contains statements that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of future growth in the different business lines and the global business, financial results and other aspects of the activities and situation relating to the TIM Group. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward looking statements as a result of various factors. Consequently, TIM makes no representation, whether expressed or implied, as to the conformity of the actual results with those projected in the forward looking statements.
Forward-looking information is based on certain key assumptions which we believe to be reasonable as of the date hereof, but forward looking information by its nature involves risks and uncertainties, which are outside our control, and could significantly affect expected results. Analysts and investors are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation. TIM undertakes no obligation to release publicly the results of any revisions to these forward looking statements which may be made to reflect events and circumstances after the date of this presentation, including, without limitation, changes in TIM business or acquisition strategy or planned capital expenditures or to reflect the occurrence of unanticipated events. Analysts and investors should consult the Company's Annual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file with the United States Securities and Exchange Commission which may identify factors that affect the forward looking statements included herein.
The 2016 preliminary financial results of the TIM Group and the data of the previous years provided for comparison purposes, were drafted in accordance with the International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the European Union (designated as "IFRS").
The accounting policies and consolidation principles adopted in the preparation of the preliminary financial results for 2016 FY and the 2017-2019 Industrial Plan have been applied on a basis consistent with those adopted in the Annual Consolidated Financial Statements at 31 December 2015, to which reference should be made, except for the new standards and interpretations adopted by the TIM Group starting from 1 January 2016 which had no effects on the 2016 preliminary financial results and the 2017-2019 Industrial Plan.
Therefore, the latter financial information doesn't take into account the new following standards that are not yet in force: IFRS 15 Revenue from Contracts with Customers, IFRS 9 Financial Instruments and IFRS 16 Leases.
In addition, the 2016 preliminary financial results have not been verified by the independent auditors.
Within the Brazil Business Unit, TIM Brasil's Management during 2016 identified that incorrect accounting entries were made in prior years in connection with the recognition of service revenue from the sale of prepaid traffic. Such incorrect accounting entries, resulted in the early recognition of revenues and consequently the underestimation of deferred revenue liabilities for prepaid traffic not yet consumed. The incorrect accounting entries did not have any impact either in terms of net financial position nor on cash and cash equivalents.
In light of the above, the comparative financial information as of 31 December 2015 have been revised, segment information included.
Segment information is consistent with the prior periods under comparison with the exception of the Media Business Unit that, starting from 1 January 2016, as a result of the change in the operational mission of Persidera, is included in the Domestic Business Unit.
Furthermore, the Sofora - Telecom Argentina group, which was disposed of on 8 March 2016, is classified as Discontinued operations.
2
Agenda
Opening Remarks - Giuseppe Recchi
A Transforming Company - Flavio Cattaneo
Turning around TIM Brasil - Stefano De Angelis
Financial Empowerment - Piergiorgio Peluso
Wrap-up - Flavio Cattaneo
Back-up
Agenda
Opening Remarks - Giuseppe Recchi
A Transforming Company - Flavio Cattaneo
Turning around TIM Brasil - Stefano De Angelis
Financial Empowerment - Piergiorgio Peluso
Wrap-up - Flavio Cattaneo
Back-up
Group FY2016 Highlights: Recovery in All Main Metrics
* including 1.3 Bln€ Mandatory Convertible Bond
Crash Phase Started in April and acted as a Game Changer in only 3 quarters
= Crash Phase
Flavio Cattaneo
5
Group 4Q'16: Robust Delivery in Italy and Brazil
Trend Uplift continued
4Q'16 Domestic: Better Results, KPIs and Operational Trends
Good set of KPIs and improving trends on core business
| 4Q'16 | KPIs | Service Revenues | Trends | |||
|---|---|---|---|---|---|---|
| Mobile | New Commercial approach is delivering excellent results: • Boosting Service revenue performance: +3.1% YoY • Increasing penetration of LTE and upselling on CB |
up to 13.3€ vs 12.8€ ARPU in 4Q'15 LTE penetration increases to 62% in MBB Customer Base Positive MNP Balance at +26k (vs -44k in 3Q'16) Best-in-class Churn rate, confirmed at 22.8% on FY basis |
+0.6% 1Q'16 |
FY'16 +1.4% +0.7% 2Q'16 |
+1.1% 3Q'16 |
+3.1% 4Q'16 |
| Fixed | Fixed Top Line turns positive: • 4Q'16 Total revenues +1.5% YoY vs -3.9% YoY in 4Q'15, supported by the new flow of enabling device sales • Flat performance in fixed service revenues, notwithstanding the negative effect of retroactive wholesale repricing |
New record-low line losses performance at -83k BB Net Adds +47K 22.3 (vs 4Q'15 BB ARPU up to € 21.2€) Fiber Net Adds +125k in 4Q'16, currently reaching over 1 mln Retail NGN customers Wholesale included, fiber lines now stand at about 1.4 mln |
-4.3% 1Q'16 |
FY'16 -4.1% -4.8% 2Q'16 |
-3.6% 3Q'16 |
-3.6% 4Q'16 |
| Telecom Italia Group Results | – | Preliminary FY'16 + 2017-'19 Plan | 7 |
Flavio Cattaneo
The 2017-'19 Transformation Plan
Pervasive Quality across the whole Company to drive Results
Infrastructure: Ultra BroadBand Leadership Everywhere in Italy
Enhancing Network Reliability, Coverage, Speed and Capacity to Provide Superior Customer Experience
Taking Fiber to Maximum Coverage
- Accelerated UBB roll out to further enable Commercial effectiveness and beat competition both at commercial and infrastructural level, also in selected C and D areas
- FTTC Expansion and Enhancement via eVDSL to deeply expand 200 Mbit/s coverage in 2017, increasing to 300 Mbit/s with further future enhancements
- FTTH/FTTB Acceleration in 30 main cities in 2017. Our market-driven approach increases target to 50 main cities by 2019.
- IP Core Network Evolution, Platform Modernization and New National Photonic Network with links up to 400 Gbps
Best 4G & 3G Everywhere
- Wider coverage and more capacity for LTE
- Voice Quality increase on 3G technology, also for tactical/commercial needs
- Inwit operates as a strategic asset, synergic and strongly integrated with TIM
- Spectrum to support commercial evolution
- Focus also on FWA technology
Attack Mode on Domestic
Implementing an Attacker Approach and Returning to Growth
- TIM adopts an attacker approach to defend market share and focuses on the business basics, customers' needs and quality to increase Ultra BroadBand take-up
- Second brand ready to protect TIM premium positioning and exploit opportunities in the low-end segment
- Lock-in clients with connected devices, leverage on billing for convenience of payment and develop a solid content strategy to enlarge addressable markets
* "Fiber Ready" Accesses Included ** Including VoIP lines, excluding Consip impact *** on total fixed CB **** on mobile calling
Turning the Corner: Domestic Revenues and Ebitda Growth
Growing on Total Revenues and Ebitda, Stabilizing Service Revenues
Transforming Domestic performance already from 2017
Flavio Cattaneo
Further Efficiencies in Cash Costs
Opex and Capex Optimization
Run Rate Total Cash Cost Efficiencies: Opex*+Capex
12
Agenda
Opening Remarks - Giuseppe Recchi
A Transforming Company - Flavio Cattaneo
Turning around TIM Brasil - Stefano De Angelis
Financial Empowerment - Piergiorgio Peluso
Wrap-up - Flavio Cattaneo
Back-up
13
A Strong Start Towards 2019
After 2016, Turnaround continues
2016 Turnaround Evidences 2017-19 New Positioning
Improve our brand positioning in order to become the preferred option for Postpaid customers and confirming our leadership on prepaid leveraging on the quality of our Network and new offer schemes
Introduction of digital services bundled in the offers through the development of strategic partnerships with OTTs and content players Commercial
Develop a Convergent n-Play offer expanding the existing TIM Live FTTX coverage in Rio and São Paulo, exploiting the 700MHz LTE/WTTx coverage and also establishing partnerships to create 4P convergent offers (e.g. SKY)
Adapt commercial strategy to implement a regional approach exploiting our different market position and redesign go to market
Deploying a Faster and Wider Broadband Network
Expanding 4G and 3G coverage
(%)
South and southeast: additional 1,800MHz spectrum availability in 2017 to boost speed and improve customer experience
North, northeast and middle east: beginning of the 700MHz frequency roll out will guarantee more capacity and better coverage
Mobile Market Scenario & TIM Revenue Share Evolution
A Better "value for money" positioning
Voice On + Off
Mobile Convergence in SP/RJ and Selected Regions Customer base mix 66.2 mln Voice Mobile Data Messaging (SMS + WhatsApp) Customers
2015 2016 2017e 2018e 2019e Prepaid Postpaid Postpaid mix 21% >35% >60 mln Fixed
ARPU Trend Mobile Market & TIM Revenue Share*
*TIM Revenue Share and Mobile Market Revenues consider Revenues from top 5 players, including SMEs
Financial figures compliant with TIM Participações consolidated accounting standards for FY 2016 Results and FY 2017-19 Plan
Telecom Italia Group Results – Preliminary FY'16 + 2017-'19 Plan Stefano De Angelis
Efficiency: Executing the Plan
Ensuring Delivery and Furthering Efficiency
Normalized OPEX Evolution
Financial figures compliant with TIM Participações consolidated accounting standards
for FY 2016 Results and FY 2017-19 Plan
Efficiency Plan Highlights
- High delivery: from R\$1.7 bln to R\$2.0 bln in savings (2016-18) A
- Continuous efficiency: expanding target to R\$2.3 bln at 2019 B
- Flat Opex 2019 vs. 2015 despite inflation C
Improving Profitability and Cash Generation
2015 2016 2017e 2018e 2019e
3.8
95% of urban pop.: 4G Coverage Completion
- Consistent Growth in Profitability: improving EBITDA Margin and Free Cash Flow
- Run Rate Cash Cost Reduction supported by efficiency program, offsetting Inflation and Structural Growth Impacts
- Significant Capex Reduction alongside a Strong Upside in Network Coverage: Capex optimization and contracts negotiations
2017-2019 Strategic Plan Guidance Summary
Short and Long Term Outlook
19
Agenda
Opening Remarks - Giuseppe Recchi
A Transforming Company - Flavio Cattaneo
Turning around TIM Brasil - Stefano De Angelis
Financial Empowerment - Piergiorgio Peluso
Wrap-up - Flavio Cattaneo
Back-up
20
Opex Efficiencies continue to Accrue
4Q'16 Domestic Opex Breakdown
| Organic* | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1Q'16 vs 1Q'15 | 2Q'16 vs 2Q'15 | 3Q'16 vs 3Q'15 | 4Q'16 vs 4Q'15 | ||||||||||||
| Total Opex | 2,021 | 2,020 | -1 | 2,115 | 2,251 | 2,221 | -30 | ||||||||
| 1,960 | -155 | 2,020 | 1,922 | -98 | |||||||||||
| Volume Driven | 699 | 736 | +37 | 781 | 809 | +28 | 804 | 781 | -23 | 977 | 1,029 | +52 | |||
| Opex net of Volume Driven |
1,322 | 1,284 | -38 | 1,334 | 1,151 | -183 | 1,216 | 1,141 | -75 | 1,274 | 1,192 | -82 | |||
| Labour Costs |
734 | 691 | 736 | 626 | 626 | 615 | 681 | 681 | |||||||
| Process Driven & other |
346 | 327 | 330 | 287 | 318 | 286 | 283 | 237 | |||||||
| Market Driven | 242 | 266 | 268 | 238 | 272 | 240 | 310 | 274 | |||||||
| 1Q'15 | 1Q'16 | 2Q'15 | 2Q'16 | 3Q'15 | 3Q'16 | 4Q'15 | 4Q'16 | ||||||||
| ΔYoY by destination | ΔYoY by destination | ΔYoY by destination | ΔYoY by destination | ||||||||||||
| Labour | Costs | -43 | -5.8% | Labour | Costs | -110 | -15.0% | Labour Costs |
-1.8% -11 |
Labour Cost |
flat | - | |||
| Process | Driven | -19 | -5.5% | Process | Driven | -42 | -13.0% | Process | Driven | -10.1% -32 |
Process Driven |
-46 | -16.3% | ||
| Market Driven | +24 | +9.8% | Market Driven | -30 | -11.2% | Market Driven | -11.7% -32 |
Market Driven | -36 | -11.7% | |||||
| o/w Comm. Levers | ** | ~flat -1 |
o/w Comm.Levers** | -5 | ~flat | ||||||||||
| o/w Billing & Bad Debt |
o/w Billing & Bad -15 |
Debt | -20 | ||||||||||||
| o/w Expo Spons. | -16 | o/w Expo Spons. & re-branding |
-11 |
*Organic: before non-recurring items and excluding exchange rate fluctuations ** Commercial levers include Sales, Caring & Advertising
Up in OpFCF Generation
Strong Operating Free Cash Flow Generation Performance
€mln, Reported, % YoY
Piergiorgio Peluso
New Domestic Cash Cost Efficiency Dashboard
| Run rate, €bln |
2015 | 2016 | YoY | Efficiency '18-'15 May'16 |
D Efficiency '19-'15 Feb'17 |
New Efficiency '19-'15 Target |
||
|---|---|---|---|---|---|---|---|---|
| Total Opex | 8.41 | 8.12 | -0.28 | -0.8 | +0.4 | -0.4 | ||
| Volume Driven | 3.26 | 3.36 | +0.09 | -0.05 | +0.5 | |||
| Opex net of Volume Driven |
5.15 | 4.77 | -0.38 | -0.8 | -0.1 | -0.9 | ||
| Process Driven |
1.28 | 1.14 | -0.14 | -0.32 | -0.2 | |||
| Market Driven | 1.09 | 1.02 | -0.07 | -0.23 | ||||
| Labour Costs |
2.78 | 2.61 | -0.16 | -0.2 | +0.1 | |||
| Total Capex | 3.90 | 3.71 | -0.19 | -0.8 | -0.2 | -1.0 | ||
| Traditional | 1.99 | 1.65 | -0.35 | -0.5 | -0.2 | |||
| NGN | 1.70 | 1.92 | +0.22 | -0.15 | ||||
| Real Estate | 0.20 | 0.14 | -0.06 | -0.15 | ||||
| Total Cash Costs | 12.31 | 11.83 | -0.48 | -1.6 | -0.3 | -1.9 |
Group Cash Flow Generation and Deleverage
Cash Flow Generation Driven by Operations Combined with a Sustainable Dividend Policy
- Deleverage through Operating Cash Flow generation is a priority, supported by operational and financial discipline
- 2017-2018 Free Cash Flow: ~700 mln per annum on average including spectrum*
- No need for divestiture to pursue debt reduction
- Dividends payment confirmed on Savings Shares according to statutory obligations. No Dividend on Ordinary Shares paid in Plan years
- 2018 Net Debt/Ebitda confirmed below 2.7x and further improvement in 2019
Agenda
Opening Remarks - Giuseppe Recchi
A Transforming Company - Flavio Cattaneo
Turning around TIM Brasil - Stefano De Angelis
Financial Empowerment - Piergiorgio Peluso
Wrap-up - Flavio Cattaneo
Back-up
Guidance Update
Outlook
- Total Revenue Growth, Service Revenue stability in 2017-'19
- Ebitda YoY low single digit growth in 2017-'19
- NGAN coverage already upgraded from 56% to ~60% YE'16 and from 75% to ~ 80% YE'17 YE'18 Target is now upgraded from ~84% to ~ 86%; YE'19 one is set at ~95%
- LTE Coverage upgraded from 95% to >96% YE'16 and from 96% to 98% YE'17 YE'18 Target moves up from 98% to ~99%; YE'19 one is set > 99%
- YE'18 NGN Customers target increased 10%, from 5mln to 5.5mln Further Total Fiber Customers growth into 2019
- Lines losses reduced at parity by 2018
- Increase in Total Domestic Efficiency Target: from 1.6 Bln€ '15-'18 run–rate to 1.9 Bln€ '15-'19 run-rate
- Cumulative '17-'19 Capex: ~11 Bln€*
- Group Capital Intensity to drop below 20%* in 2019, in line with coverage targets fulfillment. Target includes additional investments in Italy in selected C and D areas
- Operational and Financial Discipline fully support <2.7x Net Debt/Ebitda target in 2018, without the need of any Disposal*. Further leverage reduction in 2019.
Agenda
Opening Remarks - Giuseppe Recchi
A Transforming Company - Flavio Cattaneo
Turning around TIM Brasil - Stefano De Angelis
Financial Empowerment - Piergiorgio Peluso
Wrap-up - Flavio Cattaneo
Back-up
FY'16 - TI Group Results Overview
- Group
- Revenues: € 19.0 bln
- EBITDA* : € 8.2 bln
- Revenues: € 15.0 bln Domestic
- EBITDA* : € 6.9 bln
- Revenues: € 4.0 bln
- EBITDA* : € 1.3 bln
- Revenues: € 333.5 mln
-
EBITDA* : € 163.6 mln
-
Capex: € 4.9 bln
- Net Debt: € 25.1 bln
- NGN: 14.3 mln Households in 1,677 Cities
- 4G: >96% of Population in 6,704 Cities
- 4G: 1,255 Cities with 74% of urban population covered
- 3G: 2,883 Cities with 89% of urban population covered
- Tenancy Ratio: 1.72x
- EBITDA Growth: +13% YoY
Inwit
Brazil
Strategic Plan: Business Opportunities
Consumer Commercial Approach
- Lock-in through devices and payments
- Second brand is Ready
- New Stores with Adjacent & Enabling products, and Best Quality
-
Full speed on convergence and innovation, including contents digital services and all devices (I.o.T)
-
Fixed
- Lock-in through devices/goods, contents, hyper-convergence
- Attack on strategic area; strong upsell to UBB; content as a driver
- Building differentiation going over 4-Play: video, gaming, smart home, IoT, devices
- Strong growth of bundles, combined with selected tariff/offers
- Dynamic pricing (on/off peak, local, etc.) to exploit capacity and other features;
- Omnichannel caring and upselling
- Sustain ARPU, leveraging on high value devices, launch selected tariff/offers
-
New CRM System to reinforce cross & upselling, enriching offer
-
Exclusive portfolio to differentiate offer
- New approach on Content streaming
- Gain Loyalty
- Maximize share of household spending
New Steps:
- Exclusive deal with RAI (National TV) on Premium Italian Movies
- Negotiations ongoing on Sport
- Working on Simulcast + Interactivity with linear channel
- Moving ahead with Original projects
- A unique, simple and attractive gateway to access all contents and services at Home
- Cutting-edge devices to access contents anytime and everywhere
Total Quality, exclusive Contents and Features to grow Fixed and Mobile Top Line, underpin UBB Take-Up and Maximize Household Spending
Market Share Protection
Focus on Convergence
Value Protection
Business Commercial Approach
- Leveraging ultra broadband infrastructure and strong brand
- Locking customer base (i.e. "value", financial mechanisms)
Build a distinctive positioning vs. global OTT into IaaS and PaaS:
- Leveraging sales and caring proximity model
- Focusing on "managed" services and guaranteeing full compliance to EU rules (e.g. local data storage)
- Adopting a cooperative approach with local developers
Further invest in ultra broadband and ICT infrastructure (i.e. datacenter)
Extend leadership to ICT environment:
- Building service/data oriented "over-thenetwork" portfolio
- Creating open environment, maintaining delivery and management control
- Reinforcing IT skills in commercial and operation
Stabilization of market share also on Business, Locking-in Customers for a stable Top Line
Taking Efficiencies to the Heart of the Organization
An Efficiency Program based on three synergic layers, aimed at enhancing Cash Flow generation through the reduction of Total Cost of Ownership, while supporting Commercial Approach leveraging on improved flexibility and time to market
COSTS OPTIMIZATION LEAN ORGANIZATION PROCESSES RE-ENGINEERING AND TRANSFORMATION Processes & Procedures "Safari": mapping of business core processes to be concluded by 2017, involving ~400 core processes out of 700 internal ones; updating/definition of 1300 procedural documents, and updating/elimination of 190k operating documents Current processes optimization and re-engineering: a new transformation program has been started to quickly address and fix processes inefficiencies optimizing current procedures. The plan is rolling and includes over 150 actions, with significant benefits in terms of churn reduction, revenues increase, cost saving and customer satisfaction improvement Simplification of organizational structure and Rightsizing Reconversion of personnel via Job Center to increase internalization: more than 4k people involved Further Revenue support Structural cash costs efficiency: cash cost reduction Run Rate '19vs'15 of 1.9 Bln€ Sharp reduction of Opex not directly generating business Start of decommissioning program with initial benefits on TCO Vendor Consolidation
Re-launch of Subsidiaries
33
• Keeping control of Inwit and exploting synergies with TIM roll out plans, instead of asset's sale
• TI Sparkle in a re-launch phase; exploit synergies with Business division on Multi-National Clients
• Olivetti can have a new life, focusing on partnerships to launch cutting edge devices and ICT Digital Solutions
Group 4Q'16: Organic Revenues and EBITDA
Organic*, €mln, % YoY
* Before non-recurring items and excluding exchange rate fluctuations
Telecom Italia Group Results – Preliminary FY'16 + 2017-'19 Plan Giuseppe Recchi - Flavio Cattaneo – Stefano De Angelis - Piergiorgio Peluso
Group FY'16: Capex and Net Debt
€mln, % YoY
YE'15 9M'16
YE'16
YE'14 YE'15
26,651 +627 27,278
dynamics: Efficiencies also from lower procurement
costs despite higher Investments on Innovative Services in Brazil
Group Capex reduction due to different
More investment in Italy mainly driven by UBB Network roll-out &
The FY'16 Net Cash Flow at the Group level was 2,159 million euro due to the strong OpFCF generation ( 2,856 mln euro) and the benefit coming from the conversion of Mandatory Convertible Bond occurred in November '16 (1,300 mln euro)
Mobile and Fixed Performance
3Q'15 3Q'16
Mobile and Fixed Dashboard
4Q'16 Domestic Overview
000, €mln, % YoY
Domestic Mobile in Detail
Total +16.0% +20.7% +23.8% +20.5% +16.3% +11.4% +15.0%
1Q'15 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Mobile BB Customer Base
Telecom Italia Group Results – Preliminary FY'16 + 2017-'19 Plan Giuseppe Recchi - Flavio Cattaneo – Stefano De Angelis - Piergiorgio Peluso
Domestic Fixed in Detail
€/month
Fixed BB ARPU Focus on Fiber Users
TIM Brasil: 4Q'16 Results
Mobile Service Revenues (YoY%) confirm their rebound
Maturities and Liquidity Margin
€mln
(1) € 30,510 mln is the nominal amount of outstanding medium-long term debt. By adding IAS adjustments (€ 1,464 mln) and current financial liabilities (€ 598 mln), the gross debt figure of € 32,572 mln is reached.
(2) Committed Bank lines are undrawn
Well Diversified and Hedged Debt
Maturities and Risk Management
Average m/l term maturity: 8.02 years (bond only 8.44 years)
Fixed rate portion on gross debt approximately 70.7%
Around 40% of outstanding bonds (nominal amount) denominated in USD and GBP and is fully hedged
Cost of debt: ~5.1 %
N.B. The figures are net of the adjustment due to the fair value measurement of derivatives and related financial liabilities/assets, as follows:
-
the impact on Gross Financial Debt is equal to 1.951 €/mln (of which 308 €/mln on bonds)
-
the impact on Financial Assets is equal to 1.115 €/mln.
Therefore, the Net Financial Indebtedness is adjusted by 836 €/mln.
N.B. The difference between total financial assets (€ 7.455 mln) and C&CE and marketable securities (€ 5.483 mln) is equal to € 1.972 mln and refers to positive MTM derivatives (accrued interests and exchange rate) for € 1.635 mln, financial receivables for lease for € 160 mln, deposits beyond 3 months for € 100 mln and other credits for € 77 mln.
Domestic Fiber and LTE Coverage Trend
Today 4G Coverage
43
Domestic Fiber: More for the Same
First Mover Coverage accelerators More Fibre More Spees 5G
- Increase coverage plans both FTTC and FTTH based on profitability. In non-profitable areas synergies with public tenders.
- Expansion and evolution of FTTC: Expansion of coverage, introduction of e-VDSL to support access speeds of 300 Mbit / s., Improving quality.
- FTTH acceleration: confirming the approach on 30 targeted cities (+59 municipalities of EuroSUD tender) in synergy with Flash Fiber.
- By 2019 additional development of 20 cities
- Agreements with third parties:
- Agreement with Fastweb ( "Step up" in the FTTH coverage, joint development, market protection)
- Possible agreements with local utilities to optimize investments (eg .. A2A, Hera)
- Access to Fiber will be a strategic asset for the development of 5G networks
Focus on Domestic Opex
FY'16 Domestic: Focus on Investments
€mln
- Innovative Investments (+215 €mln YoY) driven by a faster pace in LTE, NGN and Cloud Services
- 82% of Innovative Capex and 81% of Traditional Capex are Network and IT, indicating strong focus on Infrastructure
Open Access - Delivery and Assurance for all Retail and Wholesale Customers
Focus on the Improvement of the Customer Experience:
57 on going activities 33 on going activities
- Schedule appointments with customers even on weekends
- Extension of the call period for appointment set-up
- Courtesy SMS
- Delivery Center to support customer continuosly
- Availability of a Virtual Agent to choose date / time appointment
- Recovery actions on customers who refuse the activation or are unavailable (4th representative)
- App to increase the autonomy of the technicians during the intervention.
- Advanced assistance with fee on configuration and customer plant
Delivery Assurance
Focus on Improving the Efficiency and the Customer Experience:
- Advanced assistance with fee on products
- Extension of digital channels and self caring strengthening, also for fiber services
- On-line diagnostic improvement to increase first call resolution
- Proactive intervention on customers (modem) to prevent the occurrence of faults
- New Work Force Optimization System and ticket allocation on the basis of the skills
For further questions please contact the IR Team
48