TIM reports higher ARPU on back of MMS surge - Italy

Due to a steady increase in voice traffic and an acceleration of VAS take-up, Telecom Italia Mobile (TIM) was able to report a 3.9 per cent ARPU increase to [euro]29.5 in its domestic market in 3Q 2002 compared with the previous quarter. In its domestic market, TIM traffic increased by 9.3 per cent during the first nine months of 2002 to 27.3 billion minutes compared with the corresponding period in 2001; revenue from VAS rose by 38 per cent during the same timeframe to [euro]530 m.

"We've had an excellent performance with our voice and VAS businesses in Italy," says Marco De Benedetti, CEO of the TIM Group. "Because of this, we're confident in meeting our growth targets while maintaining our leading position within an evolving [but not too disruptive] telecoms environment."

The TIM Group's consolidated revenue for the first nine months of 2002 (incorporating the mobile operator subsidaries in Brazil, Peru, Venezuela, Greece and Turkey) reached [euro]8.0 bn -- a 6.3 per cent growth compared with the same period last year. Gross operating profit for the nine months to September 2002 was [euro]3.9 bn (an increase of 7.4 per cent), while operating income was [euro]2.7 bn (a 7.6 per cent rise). On the down side, the TIM Group posted a [euro]748 m write-down on its shareholdings of two mobile operators -- IS TIM in Turkey and Corporacion Digitel in Venezuela.

According to De Benedetti, TIM will launch a fully commercial 3G service by the beginning of 2003. He also says that the mobile operator will run 3G services on both GPRS and UMTS networks. "We've already launched MMS [which was originally only designed as a 3G network service] over GPRS; in the last nine months we've carried two million MMSs. This is the largest number of recorded MMSs in the world."

De Benedetti adds that the company intends to complete its merger with GSM operator Blu in Italy by December 2002, a move which he claims is based upon 'sound business rational'. He explains that TIM gains an extra 500MHz in the GSM1800 band, the use of call-centres in Calenzano and Florence -- enabling TIM to cope with subscriber growth and QoS issues (especially for the management of VAS) -- and the 'valuable integration' of 670 employees of Blu into TIM. "Plus, Blu's network [and associated equipment] will accelerate our geographical rollout of UMTS," he says.

The merger of Blu -- says De Benedetti -- highlights that a sustainable mobile business model today is two to three operators within each European country (with the exception of the UK), with the top two holding around 80 per cent of the market share.

COPYRIGHT 2002 Horizon House Publications, Inc.
COPYRIGHT 2003 Gale Group