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1. Company Snapshot

1.a. Company Description

Telecom Italia S.p.A., together with its subsidiaries, provides fixed and mobile telecommunications services in Italy and internationally.The company operates through Domestic, Brazil, and Other Operations segments.It offers fixed and mobile voice and Internet, and public telephony services, as well as products managed and developed for individuals and families; and voice, data, and Internet services and products, and information and communications technology solutions for small and medium-size enterprises, small offices/home offices, the public sector, large accounts, and enterprises in the fixed and mobile telecommunications markets.


The company also manages and develops a portfolio of regulated and unregulated wholesale services for fixed-line and mobile telecommunications operators; and development, engineering, construction, and operation of network infrastructures, information technology (IT), and systems and properties.In addition, it is involved in customer care, operating credit support, loyalty, and retention activities.The company has a strategic partnership with Google Cloud.


Telecom Italia S.p.A. was incorporated in 1908 and is headquartered in Rome, Italy.

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1.b. Last Insights on TIT

Telecom Italia's recent performance has been positively influenced by several factors. Deutsche Bank upgraded the company to Buy from Hold, citing a recovery in domestic free cash flow and potential consolidation in the sector. The company's presentation at the Network X 2025 & NGON event in Paris also highlighted its improving cash flow prospects. Furthermore, Telecom Italia's 5G infrastructure is expected to drive growth, with Nokia recently winning a landmark 5G deal to deploy equipment from its AI-ready 5G AirScale portfolio. This deal will support Telecom Italia's sustainability targets and ambitions to tackle the digital divide.

1.c. Company Highlights

2. TIM's 9-Month 2025 Earnings: A Closer Look

TIM's financial performance for the first 9 months of 2025 was solid, with total revenues growing 2% to 3% year-on-year, and service revenue increasing 3%. EBITDA after lease rose 5%, while CapEx stood at EUR 1.2 billion, around 12% of total revenues. The company's equity free cash flow confirmed a structural improvement versus last year. Earnings per share (EPS) was in line with estimates at '-0.02'.

Publication Date: Nov -13

📋 Highlights
  • Q3 Operational Performance:: Delivered solid results with total revenues up 2-3% YoY and EBITDA after lease growth of 5-3%, driven by Italy and Brazil.
  • Brazil Market Leadership:: TIM Brazil achieved strong growth, with EUR 500 million bond issuance at lowest spread in 15 years, reflecting improved capital efficiency.
  • Consumer Division Stability:: Total revenues at EUR 4.5 billion (down 0.4% YoY), but service revenue growth of 1.9% in domestic markets offset by MVNO dilution.
  • Enterprise Growth Momentum:: 13th consecutive quarter of growth, with cloud services driving 23% YoY revenue increase and total enterprise revenues at EUR 2.4 billion.
  • Strategic Poste Partnership:: Signed MVNO contract and launched TIM Energia, with joint ventures targeting cloud/AI synergies and cost savings through procurement and infrastructure sharing.

Revenue Growth Drivers

The company's revenue growth was driven by its consumer and enterprise segments. In Italy, the pricing environment in the consumer segment showed a slight improvement, with mobile front book price increases already visible in the market. TIM Enterprise reported its 13th consecutive quarter of growth, with total revenues growing mid-single digit to EUR 2.4 billion, and service revenue up more than 5%. Cloud remains the key growth driver, with service revenue up 23% year-on-year.

Brazilian Operations

TIM Brazil delivered strong results, with consistent growth and improved cash generation. The market dynamics in Brazil remain highly rational, and TIM Brazil continues to deliver profitable growth, reaffirming its position as the most efficient operator in the country.

Valuation Metrics

To understand what's priced in, we can look at TIM's valuation metrics. The company's P/E Ratio is -110.05, indicating that the market is not expecting significant earnings growth in the near term. The EV/EBITDA ratio is 6.45, which is relatively low compared to some of its peers. The Net Debt / EBITDA ratio is 3.42, indicating a manageable debt burden.

Guidance and Outlook

TIM remains on track to meet its full-year guidance, with equity free cash flow expected to reach EUR 500 million. The company is also making progress on its strategic partnership with Poste, with initiatives such as the MVNO contract and the launch of TIM Energia powered by Poste. As Pietro Labriola mentioned, "We're advancing the strategic partnership with Poste to generate synergies between the two groups."

Future Prospects

TIM is optimistic about its future prospects, driven by innovation and AI, which is expected to increase ARPU. The company is also improving its FTTH network coverage with Open Fiber and expects FWA 5G to bring high margins. With a solid operational and financial performance, TIM is well-positioned to continue delivering value to its shareholders.

3. NewsRoom

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Nokia wins landmark 5G deal with Telecom Italia

Nov -17

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Italy Data Center Colocation Market Supply & Demand Analysis 2025-2030 Featuring New Operators and Existing Players Such as Aruba, DATA4 ,STACK, TIM, Equinix, Retelit, Keppel Data Centres, and Eni

Nov -04

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Is ENGIE BRASL EGA (EGIEY) Stock Outpacing Its Utilities Peers This Year?

Oct -29

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Why Telecom Italia (BIT:TIT) Is Up 6.8% After Deutsche Bank’s Upgrade and Sector Consolidation Hopes

Oct -18

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Telecom Italia upgraded on recovery in cash flow

Oct -16

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Market Chatter: KKR Forgoes FiberCop Dividends as Line Losses Increase

Oct -16

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Market Chatter: KKR Opposes Plan to Merge FiberCop With Rival Open Fiber

Oct -13

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Italy in standoff with KKR over telecom network

Oct -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.27%)

6. Segments

Domestic

Expected Growth: 1%

Domestic growth driven by increasing demand for high-speed broadband and mobile data services, supported by Telecom Italia's investments in 5G network infrastructure and fiber-optic deployment, as well as its focus on digital transformation and innovation.

Brazil

Expected Growth: 2%

Brazil's 2% growth driven by increasing mobile penetration, particularly in rural areas, and rising demand for data services. Government initiatives to improve digital infrastructure and reduce regional disparities also contribute to growth. Additionally, Telecom Italia S.p.A.'s focus on 4G network expansion and digital transformation efforts support revenue increase.

7. Detailed Products

Mobile Services

Telecom Italia offers a range of mobile services including voice, data, and messaging services to individuals and businesses.

Fixed Line Services

Telecom Italia provides fixed line services including voice, data, and internet services to residential and business customers.

Internet Services

Telecom Italia offers a range of internet services including broadband, fiber, and satellite internet to residential and business customers.

Cloud Services

Telecom Italia provides cloud services including infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS) to businesses.

Cybersecurity Services

Telecom Italia offers cybersecurity services including threat detection, incident response, and security consulting to businesses.

IoT Services

Telecom Italia provides IoT services including device management, data analytics, and IoT platform services to businesses.

Digital Services

Telecom Italia offers digital services including digital transformation consulting, digital marketing, and digital customer experience services to businesses.

8. Telecom Italia S.p.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Telecom Italia S.p.A. is medium due to the presence of alternative communication services such as VoIP and messaging apps. However, the company's strong brand presence and extensive network infrastructure mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of switching options and the high costs associated with changing service providers. Telecom Italia S.p.A.'s strong market presence and wide range of services also reduce the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of a few large equipment suppliers such as Nokia and Ericsson. However, Telecom Italia S.p.A.'s large scale of operations and diversified supplier base mitigate this threat to some extent.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the telecommunications industry, including the need for significant capital investment and regulatory approvals. Telecom Italia S.p.A.'s strong brand presence and extensive network infrastructure also make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The intensity of rivalry in the Italian telecommunications market is high due to the presence of several established players such as Vodafone and Wind Tre. Telecom Italia S.p.A. faces intense competition in terms of pricing, network quality, and customer service, which can lead to lower margins and market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 66.72%
Debt Cost 4.25%
Equity Weight 33.28%
Equity Cost 9.10%
WACC 5.87%
Leverage 200.50%

11. Quality Control: Telecom Italia S.p.A. passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Millicom

A-Score: 6.5/10

Value: 6.8

Growth: 3.7

Quality: 6.3

Yield: 8.1

Momentum: 9.5

Volatility: 4.3

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Itissalat Al-Maghrib

A-Score: 6.2/10

Value: 3.6

Growth: 2.3

Quality: 6.9

Yield: 6.2

Momentum: 9.5

Volatility: 8.3

1-Year Total Return ->

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Airtel Africa

A-Score: 5.4/10

Value: 3.9

Growth: 4.9

Quality: 5.2

Yield: 4.4

Momentum: 10.0

Volatility: 4.3

1-Year Total Return ->

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Elisa

A-Score: 5.0/10

Value: 3.9

Growth: 4.0

Quality: 6.6

Yield: 8.1

Momentum: 2.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Telecom Italia

A-Score: 4.4/10

Value: 8.6

Growth: 2.0

Quality: 2.1

Yield: 0.0

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Liberty Global

A-Score: 3.2/10

Value: 9.0

Growth: 2.3

Quality: 3.3

Yield: 0.0

Momentum: 0.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.5$

Current Price

0.5$

Potential

-0.00%

Expected Cash-Flows