(Il Sole 24 Or Radiocor) – Telecom Italia is still under pressure in Piazza Avari. As investors wonder about the government’s moves, Fitch’s downgrade announcement on the company’s debt arrived last night. The rating company revised the rating downward (from BB to BB-), confirming the negative outlook. In fact, Fitch followed decisions already made by the other agencies, and put the rating one notch above S&P (B+/negative, rating, revised Oct. 14) and Moody’s (B1/negative, revised Oct. 21). Fitch experts pointed the finger at the company’s failure to undertake decisive debt relief in 2022, as well as the impact of the deteriorating macroeconomic environment. Moreover, according to experts, the uncertainty about the future of the network does not help. Fitch also highlighted the reduced liquidity available to the telecom company to meet upcoming debt maturities of $3.4 billion in 2023 and $4.5 billion in 2024.
In the report, the rating agency assumed that Tim’s domestic sales volume would decline by -5.7% in 2022 and by 3% in 2023, before leveling off in 2024. Ebitda’s margin will stabilize at 38.5% this year%, and next year to 38.6% and 2024 to 38.9%. Increased monetary cost efficiency and higher prices due to inflation will be offset by increased competition and inflationary cost pressures. The ratio between net debt and the amount of interest, tax and depreciation at the end of the year should be 4.3 times. Fitch also takes into account that from 2022 to 2024, the company will not distribute any dividends, not even on savings.
The Iliad is still growing in Italy
Quarterly accounts released tonight by Iliad and Vodafone Italia also had an impact on Tim, highlighting the direction of the competition. Numbers in hand While Vodafone is still under pressure, Xavier Niel’s company is still growing in Italy. However, analysts have highlighted that the companies’ aggressive strategy of capturing market share through price cuts seems to be fading. In particular, Iliad raised prices recently and ultimately, in the quarter ending at the end of September, won fewer customers than expected (86k in business-to-business). Intermonte analysts commented: “For Iliad, fixed-line acquisition performance is still far from reaching critical mass in Italy, and we do not rule out the operator’s greater difficulties in gaining market share.” In the end, even for Intesa Sanpaolo, the numbers will have a neutral effect on the telecom sector.
The puzzle is still on the net
Moreover, the mystery remains about the future of the network, as the government intends to access a single network under public control, but without specifying the method. If in recent days there has been a bet on the launch of an acquisition offer by CDP, in the past few hours the project to integrate the open optical fiber network with the Tim network through the purchase of infrastructure by CDP has been considered again more likely as indicated in the Memorandum of Understanding signed in past weeks.