Telecom Italia Group

Strategy

Communication represents Telecom Italia’s past, present and future. But times are changing: the future will be increasingly about “digital life” and “advanced digital experiences” made possible by the evolution of technology, by UltraBroadBand and the spread of new services that contribute to sustainable economic growth and the improvement of people’s quality of life.

For change to happen, we will have to stay true to our primary function, which is to enable people to communicate, but with a decisive change of perspective. We will need to change our focus to the concept of digital life by looking at all our customers: individuals, businesses and public administration.” Marco Patuano, Telecom Italia Chief Executive Officer

Telecom Italia intends to take part in the digital transformation currently underway, confirming its historic role as an engine of Italy’s modernisation, helping attain the goals of the European Digital Agenda and participating in the transformation of Brazil, a strategic asset and the Group’s second most important market.

In order to meet these objectives, it is essential to increase investments in next-generation networks and in innovation, as is called for in the 2014-2016 industrial plan. At the same time, the company will keep an eye on costs and will continue to seek efficiencies and financial flexibility (including through extraordinary operations, aimed at generating value from towers in Italy and Brazil).

The new plan will also give a strong impulse to efforts to create a unique and distinctive offer focused on a convergence of high-quality services, also thanks to strategic deals with content providers (Sky) and credit card networks (Visa). Similar deals will move the Group’s focus from traditional communication between individuals to digital life solutions that will involve individuals, companies and the public administration.

In the three-year period 2014-2016 the company will invest some 14 billion euros, of which 9 billion euros in Italy. In our home market, 3.4 billion euros will be dedicated exclusively to the development of innovative assets –nearly triple the figure in the previous plan. These investments will be deployed as follows: 1.8 billion euros for the development of fixed-line broadband through the use of Fibre-to-the-Cabinet and Fibre-to-the-Home; 900 million euros for mobile UltraBroadBand networks; 700 million euros for cloud computing solutions and the Sparkle international infrastructure.

All this will enable Telecom Italia to keep the pace with the Digital Agenda and guarantee, by the end of the plan, an UltraBroadBand coverage of 50% of the Italian population on the fixed, Next Generation Access Network (NGAN) and 80% of the population on mobile, Long Term Evolution (LTE) networks.  By the end of last year, 42 Italian cities had fibre-optic cabling, while TIM’s 4G LTE service reached 50% of the population (651 municipalities), making it the widest-reaching mobile 4G network in the country.

In this context, Telecom Italia has also renewed its commitment to develop next-generation networks not only in big cities and industrial districts but also in so-called “white areas” where the time horizon in terms of return on investment is so long that it discourages investors from building infrastructure.

Investing in technology for new networks also means acting as a stimulus to the country’s economy. The result is an improvement in services, quality and guarantees – also in terms of data security and energy efficiency, which is even more important considering that the Group is the second-largest energy consumer in the country.

In South America, the strategic interest in Brazil remains confirmed. TIM Brasil’s market share continues to grow in a high-potential country. Here also the focus is on developing next-generation networks, to which the company has committed more than 11 billion reais in investments through 2016, a sum which comes on the heels of the 3.9 billion reais invested in 2013.

It is an industrial plan that extends our commitment, in terms of investments in new generation networks, data centres and new services, supported by a strict efficiency plan - alongside the cost reduction programme that has characterised the last few years. A plan for a company that is totally focused on two main objectives: re-launching the Italian market and growth in the Brazilian market.”

Marco Patuano, Telecom Italia Chief Executive Officer

Next Generation Networks

LTE (Long Term Evolution): UltraBroadBand mobile

Also known as new generation 4G network, it allows for vastly superior transmission speeds and guarantees coverage also in rural and suburban areas

NGAN (Next Generation Access Network): Fixed-line UltraBroadband

New generation fibre-optic network that grants high-speed connections

ITALY

Strong increase in UltraBroadBand (UBB)  nvestments to favour structural differentiation 

  • Change the mix between “innovative” and “traditional” investments to sustain faster development of UBB
  • Delayering network architecture to gain operational flexibility and reduce running costs
  • Access public funds (“Anti-Digital Divide” and “EuroSud” programmes) to accelerate fibre deployment in black and grey areas

 

BRAZIL

Constant attention to quality and increased focus on innovative components to fully capture the growing potential of data

  • Increase investments to immediately complete 3G offer and develop 4G 
  • Higher focus on network infrastructure and efficiency in terms of quality and coverage
  • Continuous deployment of fibre to support data traffic growth
  • Develop all opportunities generated by RAN access network sharing 

• Cambiare il mix fra investimenti “innovativi” e investimenti 

 

“tradizionali” per un più rapido sviluppo dell’UltraBroadBand 

 

• Snellire l’architettura di rete per guadagnare in flessibilità operativa e 

 

ridurre i costi di gestione

 

• Usufruire dei fondi pubblici - i programmi “Anti-Digital Divide” e 

 

“EuroSud” - per accelerare lo sviluppo della fibra nelle zone bianche 

 

e grigie del Paese