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TIM Group

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TIM S.p.A.
FormerlyTelecom Italia S.p.A. (1994–2016)
Company typePublic
BITTIT
BITTITR
ISINIT0003497168
IT0003497176
IndustryTelecommunications
PredecessorSIP
Founded27 July 1994; 30 years ago (1994-07-27)
FounderIRI
SuccessorFibercop (Italian network asset)[1]
Headquarters,
Italy
Area served
Italy
Key people
Products
RevenueIncrease 16.296 billion (2023)[3]
Decrease €−1.107 billion (2023)
Total assetsDecrease €69.19 billion (2021)
Total equityDecrease €17.41 billion (2021)
Owners
Number of employees
Decrease 51,929 (end 2021)
Subsidiaries
Websitegruppotim.it

TIM S.p.A. (formerly Telecom Italia S.p.A.) is an Italian telecommunications company with headquarters in Rome, Milan, and Naples (with the Telecom Italia Tower), which provides fixed telephony and DSL data services.[5][6]

It is the largest Italian telecommunications services provider in revenues and subscribers. It was founded in 1994 by the merger of several state-owned telecommunications companies, the most prominent of which was SIP, the former state monopoly telephone operator in Italy.[7][8][9]

The company's stock is traded in the Borsa Italiana. The Italian State has exercised the "Golden Power" on TIM since 2017, which allows the government to take a number of actions when the strategic interests of the country are concerned.

TIM Group has also a subsidiary in Brazil, known as TIM Brasil, with 72.6 million customers.[10] The brand covers over 114 million customers worldwide.[11]

As April 2024, Net sales are distributed geographically as follows: Italy (72.9%) and Brazil (27.1%).

History

[edit]

1925–1964: STIPEL and early mandatory phone tax

[edit]

In 1925, the Italian phone network was reorganised by the Benito Mussolini cabinet and the company STIPEL was established in the same year. The original core of Telecom Italia included four companies which operated in a specific geographical area.:[12] TIMO, TE.TI., TELVE and SET.

1964–1994: SIP

[edit]

In 1964, Società Idroelettrica Piemontese (SIP), a former energy company founded in 1918, ceased producing energy and acquired all of the Italian telephone companies, becoming Società Italiana per l'Esercizio Telefonico (SIP). It was run by the Italian Ministry of Finance.[citation needed]

SIP was a state monopoly from 1964 to 1996 and Italian people had to pay the "Canone Telecom" (a line rental charge of about €120 per year, plus hardware rental and other minor costs) in order to have a phone at home.

1994–2005: Telecom Italia, Telecom Italia Mobile and DSL services

[edit]

Telecom Italia S.p.A. was officially created on 27 July 1994 by the merger of several telecommunications companies among which SIP, IRITEL, Italcable, Telespazio and SIRM (companies owned by STET).[13][14] This was due to a reorganization plan for the telecommunications sector presented by IRI to the Minister of Finance.

In 1995, the mobile telephony division was spun off as Telecom Italia Mobile (TIM), while Telecom Italia, under managing director Francesco Chirichigno,[15] would take care of fixed and public telephony and network infrastructures. Interbusiness, Italy's largest Internet network, was created and in the same period with Telecom Italia Net (Tin.it) and the first ISPs, Internet access became a reality in Italy.[16] In 1996, TIM introduced a new prepaid rechargeable phone card[17] (GSM), and one year later launched short messaging service (SMS) capability. In 1997, under the chairmanship of Guido Rossi, Telecom Italia was privatised and was transformed into a large multimedia group.

By 2001, the company was in debt and was acquired by Marco Tronchetti Provera. The following year, the group released its DSL Flat service in Italy, Alice ADSL, with a download speed of 32 kbit/s and an upload speed of 8 kbit/s for €40/month plus a monthly based tax of €14.57, the "Canone Telecom", besides the mandatory monthly bills for home telephone numbers (a home telephone number was required for ADSL service). Telecom Italia Media, the group's multimedia company, was formed in 2003 from SEAT Pagine Gialle, focussing its business on the television sector with La7 and MTV channels.[18]

After the reorganization of editorial activities, Telecom Italia acquired Tin.it and Virgilio from Telecom Italia Media in 2005 .[19]

The Telecom Italia Group also operates in South America; in Brazil as TIM Brasil, and in Argentina and Paraguay with Telecom Argentina. TIM Brasil has its local headquarters in Rio de Janeiro.[20] Telecom Italia also had a 50% share in the Bolivian telecommunications company Entel until its share was nationalised by the Bolivian government in 2008.[21][22]

2005–2014: Telecom Italia acquired by Telefónica

[edit]

Telecom Italia reported mounting debts in 2005, and, one year later, CEO Marco Tronchetti Provera resigned.[23]

In 2007 the company was bought by Telco, a consortium of Telefónica and several Italian banks.[24] Telefónica owned 46% of Telco, the holding company that controlled 22% of Telecom Italia.

In late 2013, Telefónica announced its intention to acquire the entirety of Telco by January 2014, potentially becoming Telecom Italia's largest shareholder.[25][26] The plan, however, is being challenged by the Brazilian competition authority since Telefónica and Telecom Italia, with Vivo and TIM respectively, are the two largest telephone companies competing in Brazil.

2015: Rebrand

[edit]

In 2015, the company started a rebranding process towards the unified TIM brand, which would no longer be used only to identify mobile telephony offers but also for fixed telephony ones, abandoning the Telecom Italia brand.[27][28][29][30] In the same year, the board of directors approved the new company's division, Infrastrutture Wireless Italiane (INWIT) which operates 11,500 wireless towers.[31][32]

2015–2018: Vivendi

[edit]

It was revealed in October 2015 that shareholders Vivendi would raise their stakes further in the company from its current level of 15.49%.[33] As of May 2017, Vivendi owns 24.6% of the company with Vivendi's CEO Arnaud de Puyfontaine becoming executive chairman of Telecom Italia.[34] Amos Genish is the new CEO since 28 September 2017 and he has been criticized to have fired 4500 Telecom Italia employees in June 2018.[35] He has been substituted by Luigi Gubitosi, who became the new CEO on 18 November 2018.[36]

In 2016, following the rebranding that led to the adoption of the single TIM brand, the parent company also decided to change its identity. The company name of Telecom Italia S.p.A. it was in fact changed to TIM S.p.A., however still maintaining the previous name on some occasions.[37]

2019-2023: Telecom Italia renamed TIM Group

[edit]

In 2019 Telecom Italia was renamed TIM Group.[38]

2023–present: the spin-off of NetCo

[edit]

On March 7, 2024 at the TIM Capital Market Day presentation, the stock collapsed during the day with -23.79%, with a price of €0.2118.[39] During the day approximately more 13% of the share capital was traded.[40][41] It has a market cap of $5.02 Billion. The following day the stock closed the trading day up by +4.82% at a price of €0.222. Consob is investigating the stock collapse of March 7, 2024.[42] On 8 March 2024, it has a market cap of $6.85 Billion.
On Monday 11 March 2024, after an emergency cda meeting called the day before, on Sunday, further data are specified to the market, the stock has a further decline of -4.59% returning to the closing of the stock market session at the price of €0.2118, same price as Thursday 7 March 2024. Despite the purchase on the market of 500,000 shares by the CEO, Pietro Labriola, investors are not inclined to support the business development plan presented by the CEO.[43][44][45]
On March 14, 2024, the stock closed the trading day up by +3.49% at a price of €0.2197.[46] On March 21, 2024, according to the Financial Times, the shares collapsed after the presentation of the business development plan for bearish positions of around 1 billion euros.[47][48] The stock closed the trading day down by -4.03% at a price of €0.2143. On May 29, 2024, the first quarterly report of 2024 is presented. The group's total revenues amounted to 3.9 billion euros, up 1.2% year on year. However, net debt after lease rises by another billion to 21.4 billion.[49] As of May 2024 TIM has a market cap of $5.77 Billion. On May 29, 2024, the shares, before the presentation of the quarterly report, closed trading at €0.2452. On May 30, 2024, the stock opened with a sharp decline and lost up to 10% over the course of the trading day, but around 5.15 pm before the close of trading the news arrived that the European Union had approved the sell of the network at KKR and then the stock has a vertical rise with a gain of +1.55% closing at a price of €0.249.[50][51][52] On 12 June 2024 Moody's improves its rating on Tim, raising it to Ba3 from B1.[53][54]on 1 July 2024 the transfer of the network to KKR takes place, with a debt reduction of 22 billion euros.[55] On the trading day of 1 July 2024, the TIM stock closes at €0.226 +1.12%.[56][57] The operation values the network at a total of 18.8 billion euros, expandable up to 22 billion with the earn outs also linked to the possible merger between Netco and Open Fiber. Technically, the operation was carried out by giving Fibercop[58] the business unit including the fixed network and wholesale activities. Finally Fibercop was taken over Optics Bidco controlled by KKR.[59][60][61][62] On 9 July 2024, S&P, after the sale of the network to the KKR, promoted the TIM group to BB from the previous B+, with the outlook remaining stable.[63] On July 11, 2024, the share price closed the trading day at €0.2408 +1.48% and TIM group has a market cap of $5.70 Billion.

Unfortunately, Vivendi's complaints about the sale of TIM's network, with a legal dispute at the Milan court, where the sentence is expected on November 5, 2024, on July 22, 2024, the TIM stock lost the gains acquired last week, and closed trading at a price of €0.2325 with a loss of -4.79%.[64][65] On July 23, 2024, the share price closed the trading day at €0.2258. On July 24, 2024, the contracts in place by TIM for the rental of the network now owned by NetCo, or FiberCop, are published, approximately 2 billion euros every year until 2029 up to 2.5 billion euro to 2039. Onerous contracts for TIM that do not compensate for the revenues of between 100 and 170 million euros to provide TIM Datacenters and the mobile network to FiberCop.[66] For this reason the stock closes at the price of €0.2254, down by -0.18%. However, it appears that the quarterly data to be published on July 31, 2024, may provide further improvements on debt, a further reduction of 0.5 or 0.6 billion euros.[67] On July 31, 2024, Tim presented its half-yearly results, with a debt that after the sale of the network settles at 8.1 billion euros, with a further reduction of 0.6 billion expected for the end of the year. TIM had a turnover of 7.1 billion euros (+3.5%) and an EBITDA of 2.1 (+9.4%).[68]Fitch, following Moody's and S&P, upgraded the rating to BB with a stable outlook. On August 8, 2024, CEO Labriola increased his shareholding in TIM to 4.5 million ordinary shares.[69] On August 14, 2024, CEO Labriola specifies that the network rental costs are lower than what was reported in the newspapers in recent days and are approximately 1.3 billion euros per year, which must also be taken into account the lower network management and personnel costs.[70] TIM also sells additional shares of INWIT, approximately 10%. Shares sold to Impulse I for approximately €10.43 per share.[71] On August 19, 2024, TIM announces a partnership with Nokia to enhance the 5G mobile network in Brazil. Following the announcement, the stock closes the trading day with a price of €0.2361 +3.92%.[72] On October 2, 2024, TIM examines the proposal formulated by the Italian Ministry of Economy and Finance together with the Asterion fund for the purchase of the entire share of Sparkle. TIM would thus conclude the debt restructuring process by collecting an additional 700 million euros.[73] After many days of trading TIM shares on the rise or at least appreciating, unfortunately on 23 October 2024, the stocks are suddenly falling again due to the corruption charges formulated by the Guardia di Finanza and the Rome Prosecutor's Office against the director Simone De Rose, head of the Procurement function office of TIM Group and Emilio Graziano, manager of NTT Data Italia.[74] TIM immediately appoints a new manager, Giampaolo Leone. TIM evaluates a request for compensation for damages to the dishonest employee and collaborates with the Guardia di Finanza inspectors in the investigation.[75] On November 5, 2024, the subsidiary TIM Brasil has continued to show strong growth in revenues and profits, confirming itself as a strong cash flow generator for the group. [76][77] On 13 November 2024, TIM Group published Q3/9M 2024 Financial Results. TIM Group has revenues growing to €10.7 billion with gross operating margin rising to €2.7 billion, while Tim's adjusted net financial debt after lease is €8.0 billion.[78][79][80] The shares are at a price of €0.2172, not far from the lows of March 2024. On November 14, 2024, after the 9M financial results presentation day, the shares closed daily trading with an increase of +8.15% at a price of €0.2349. Furthermore, CEO Pietro Labriola spoke about the possibility of a return of a stock dividend in February 2025 if the financial situation is further consolidated and improved.[81][82]

Main shareholders

[edit]

The main shareholders of TIM Group on 25 November 2022 are:[83][84]

Rank Name Percentage Substantial shareholders
1 Vivendi SE (France) 23.746%
2 Cassa Depositi e Prestiti S.p.A. (Italy) 9.810%
3 Telecom Italia S.p.A. 0.756%

The main shareholders of TIM Group on 18 May 2023 are:[85]

Rank Name Percentage Substantial shareholders
1 Vivendi SE (France) 23.746%
2 Cassa Depositi e Prestiti S.p.A. (Italy) 9.810%
3 Telecom Italia S.p.A. 0.685%

The main shareholders of TIM Group on 30 April 2024 are:[86]

Rank Name Percentage Substantial shareholders
1 Vivendi SE (France) 23.75%
2 Cassa Depositi e Prestiti S.p.A. (Italy) 9.81%
3 Telecom Italia S.p.A. 0.69%
4 Foreign institutional investors 44.2 %
5 Italian institutionnals 3.75 %
[edit]

Telecom Italia Mobile illegal charging money for "free" Internet providing renewals

[edit]

Telecom Italia Mobile illegally charged money for Internet providing renew subscriptions for 5 years to its customers during the "free" subscription renewals.[87]

Fraud in Brazilian prepaid mobile lines

[edit]

On 8 August 2012, TIM Brasil became involved in a massive scandal in Brazilian news after the release of report by the Brazilian National Telecommunications Agency Anatel.[88]

The report points that on TIM's prepaid voice plan (24.7% market share), called "Infinity" (in which the user pays roughly US$0.12 for each unlimited time call), the calls were intentionally dropped by the company, forcing the customers to make (and pay for) new calls to keep talking. In just one day, 8.1 million calls were dropped and the total profit was approximately $2 million. Upon release of the report, the Public Ministry of the Paraná State filed a lawsuit against TIM asking that it stop selling new mobile lines in Brasil and pay a multimillion-dollar fine for the damages against consumers.[89]

Operations

[edit]

The Telecom Italia Group provides phone landline services and mobile services in Italy, GSM mobile phone services in Italy and Brazil through its TIM and TIM Brasil subsidiaries, and DSL Internet and telephony services in Italy and San Marino (through Telecom Italia San Marino). It also operates in international telecommunications services for other operators and corporations, through its subsidiary Telecom Italia Sparkle. In 2013, the total amount of the company's debt was about 26 billion €.[90] Telecom Italia has 66,025 employees.

Telecom Italia also controls Olivetti, a manufacturer of computer peripherals and mobile phones. On March 31, 2014, Telecom Italia led both the direct fixed access lines market with a 62% share, and the mobile postpaid segment with a 45% market share. In the mobile "prepaid" segment Telecom Italia owned a 31.5% market share together with Vodafone.[91]

After the merger of Wind and 3 Italy, approved on August 6, 2015, Telecom Italia is now the country's second largest carrier with 30 million customers, followed by Vodafone with 25 million customers.[92] Telecom Italia has preserved its leadership on the direct fixed access lines market and the mobile postpaid segment.[93]

High debt issue

[edit]

The high accumulated debt was mainly due to the 1999 takeover bid carried out by Roberto Colaninno, who acquired the company and subsequently offloaded the purchase costs onto the company itself.[94][95]
Telecom Italia S.p.A. deals with a total debt of 27 billion Euro as of the end of 2019.[96] Moody rated the debt with a B1 grade negative outlook in 2015.[97] As of the end of 2023, the net financial debt after lease for the TIM Group stood at €20.3 billion. Additionally, the adjusted net financial debt was €25.7 billion.[98]

Removing high debt

[edit]

On 1 July 2024, with the finalization of the sale of the network to KKR, the debt was reduced by €22 billion ($23.6 billion). So TIM Group no longer has high debt. [99][100][101] The remaining debt is in sharp reduction.[102][103] Less than €7.5 billion by the end of 2024.[68]

Environmental practices and initiatives

[edit]

In 2002, Telecom Italia subscribed to the United Nations corporate responsibility initiative Global Compact.[104] It is also member of a number of stock market indexes which include companies focused on corporate social responsibility, including the Dow Jones Sustainability Indexes and those administered by FTSE Group's FTSE4Good. Its part-owned Brazilian subsidiary, TIM Brasil, is listed in the Bovespa's ISE (Índice de Sustentabilidade Empresarial) index.[105]

Telecom Italia promotes a sustainability strategy including both environmental and social issues: in June 2014 it signed an agreement with A2A to buy energy only from renewable sources.[106]

Logo history

[edit]

See also

[edit]

References

[edit]
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  2. ^ "Salvatore Rossi - Presidente Telecom Italia | Gruppo TIM". Telecomitalia.com. Retrieved 22 November 2019.
  3. ^ "Telecom Italia". borsaitaliana.it. borsaitaliana.it. Retrieved 1 August 2024.
  4. ^ "TIM Group's Shareholders". www.gruppotim.it. Retrieved 3 March 2022.
  5. ^ "Legal notes | TIM Group". telecomitalia.com. Retrieved 9 November 2019.
  6. ^ "Profile | TIM Group". telecomitalia.com. Retrieved 9 November 2019.
  7. ^ "1980s – 1990s | TIM Group". telecomitalia.com. Retrieved 9 November 2019.
  8. ^ "Business history | archiviostorico.telecomitalia.com". archiviostorico.telecomitalia.com. Retrieved 28 June 2017.
  9. ^ Glover, John (1 November 1995). "Italy Invigorated". Multichannel News International. Capital Cities/ABC. p. 28. Retrieved 16 May 2024.
  10. ^ Scott Bicheno (14 January 2016). "Telecom Italia formally unifies brands under TIM name". telecoms.com. Retrieved 24 January 2018.
  11. ^ "Breaking Barriers to Transform TIM's Brand and Business". Interbrand. Archived from the original on 21 October 2019. Retrieved 24 January 2018.
  12. ^ "Economics and politics of telecommunications" (PDF).
  13. ^ "Telecom Italia history on official site".
  14. ^ "nasce Telecom Italia". Corriere.it (in Italian). Archived from the original on 3 August 2012.
  15. ^ Glover, John (1 November 1995). "Italy Invigorated". Multichannel News International. Capital Cities/ABC. p. 30. Retrieved 16 May 2024.
  16. ^ "Archivio Corriere della Sera". archiviostorico.corriere.it.
  17. ^ "The economics of mobile telecommunications page 45 reference #50".
  18. ^ "Telecom Italia Media official site". Archived from the original on 13 July 2010.
  19. ^ "News archive on IlSole24ore".
  20. ^ "BNamericas - Develop your Latin America business". BNamericas.com.
  21. ^ "Bolivia acepta arbitraje por nacionalización de una telefónica" (in Spanish). El Comercio. 27 August 2008. Retrieved 13 April 2010. [dead link]
  22. ^ "UPDATE 1-Bolivia announces takeover of Telecom Italia unit". Reuters. 1 May 2008. Retrieved 17 September 2020.
  23. ^ "Pirelli as manager and investor in Telecom Italia (2001-2007)" (PDF). Archived from the original (PDF) on 8 September 2015. Retrieved 24 August 2015.
  24. ^ Burnett, Victoria; Kiefer, Peter (29 April 2007). "Telefónica Gets Controlling Stake in Telecom Italia". The New York Times.
  25. ^ Mesco, Gabriele Lamonica And Manuela (23 September 2013). "Telefónica in Talks to Become Majority Stakeholder in Telecom Italia's Holding Company". Wall Street Journal. ISSN 0099-9660. Retrieved 2 April 2021.
  26. ^ Emsden, Christopher. "Telefonica to take control of Italy's Telco". MarketWatch. Retrieved 2 April 2021.
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  31. ^ Aycock, Jason (5 June 2015). "Telecom Italia gets OK for towers IPO, values it at €2.34B". Seeking Alpha.
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  36. ^ Economia, Redazione (18 November 2018). "Chi è Gubitosi, l'uomo delle operazioni difficili". Corriere della Sera.
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  43. ^ "Telecom cede ancora in Borsa: senza la cessione della rete il debito sale". ilsole24ore.com. ilsole24ore.com. 11 March 2024. Retrieved 12 March 2024.
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  45. ^ "Tim integra il piano industriale e Labriola compra 500 mila azioni, ma il titolo perde oltre il 4%: ecco perché. Analisti a confronto". milanofinanza.it. milanofinanza.it. 11 March 2024. Retrieved 12 March 2024.
  46. ^ "Tim rialza la testa, negli ultimi giorni scambiato il 48% del capitale". ilsole24ore.com. ilsole24ore.com. 14 March 2024. Retrieved 15 March 2024.
  47. ^ "Telecom Italia targeted by short sellers with €1bn bet". ft.com. ft.com. 21 March 2024. Retrieved 21 March 2024.
  48. ^ "Tim, quasi 1 miliardo di euro di posizioni ribassiste. Ecco perché il titolo è crollato dopo il piano di Labriola". milanofinanza.it. milanofinanza.it. 21 March 2024. Retrieved 21 March 2024.
  49. ^ "Tim, trimestrale in linea prima della vendita della rete. I margini della ServiceCo salgono di oltre il 10%". milanofinanza.it. milanofinanza.it. 29 May 2024. Retrieved 29 May 2024.
  50. ^ "Tim: via libera Ue all'acquisto della rete da parte di Kkr. Il titolo passa da -10% a +1,5% in chiusura". ilsole24ore.com. ilsole24ore.com. 30 May 2024. Retrieved 30 May 2024.
  51. ^ "TIM, Commissione UE approva acquisizione di NetCo da parte di KKR". lastampa.it. finanza.lastampa.it. 30 May 2024. Retrieved 30 May 2024.
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  55. ^ "Tim, il 1° luglio il D-Day per la cessione della rete a Kkr. Cosa succederà dopo". milanofinanza.it. milanofinanza.it. 24 June 2024. Retrieved 1 July 2024.
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  58. ^ "L'Azienda". fibercop.it. fibercop.it. Retrieved 1 July 2024.
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  64. ^ "TELECOM ITALIA ISIN IT0003497168". milanofinanza.it. milanofinanza.it. 22 July 2024. Retrieved 22 July 2024.
  65. ^ "Vivendi si divide in tre: Canal+ quotata a Londra, Havas ad Amsterdam e Louis Hachette a Parigi. Ecco il piano di scissione aggiornato". milanofinanza.it. milanofinanza.it. 22 July 2024. Retrieved 22 July 2024.
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  68. ^ a b "Nuova Tim, crescono i ricavi e i margini". milanofinanza.it. milanofinanza.it. 31 July 2024. Retrieved 31 July 2024.
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