Telecom Italia – Telecom Argentina FY 2011 Preliminary Results and 2012‐14 Plan Outline...
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Transcript of Telecom Italia – Telecom Argentina FY 2011 Preliminary Results and 2012‐14 Plan Outline...
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Telecom Italia – Telecom ArgentinaFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Safe HarbourThese presentations contain statements that constitute forward‐looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and includestatements regarding the intent, belief or current expectations of the customer base, estimates regarding future growthin the different business lines and the global business, market share, financial results and other aspects of the activitiesand situation relating to the Company and the Group.Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, andactual results may differ materially from those projected or implied in the forward looking statements as a result ofvarious factors. As a result thereof, Telecom Italia S.p.A. makes no representation, whether express or implied, as to theconformity of the actual results with those projected in the forward looking statement.Forward‐looking information is based on certain key assumptions which we believe to be reasonable as of the datehereof, but forward looking information by its nature involves risks and uncertainties, which are outside our control, andcould significantly affect expected results.Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of the dateof this presentation. Telecom Italia S.p.A. undertakes no obligation to release publicly the results of any revisions tothese forward looking statements which may be made to reflect events and circumstances after the date of thispresentation, including, without limitation, changes in Telecom Italia S.p.A. business or acquisition strategy or plannedcapital expenditures or to reflect the occurrence of unanticipated events. Analysts and investors are encouraged toconsult the Company's Annual Report on Form 20‐F as well as periodic filings made on Form 6‐K, which are on file withthe United States Securities and Exchange Commission.
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FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Agenda
2
BU Argentina 2011 Results (IFRS)
Telecom Argentina Plan
Take-Aways
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
2011 Main Results
3
2,324
+201M€+24.1%
+674M€+26.5%
1,824
722896
0FY10 FY11
3,2202,546
4Q
9M613 759
221276
FY10 FY11
1,035834
4Q
9M
EBITDARevenues
+24.1%
+27.4%
+24.8%
+23.8%
Strong operating performance in 2011 fostered revenues and profits
#1 Revenue share & #2 Market share in Mobile
Bundling fixed voice +ADSL +mobile internet
Flat pricing & bundling add value to fixed clients
Paraguayan unit back on a growth track
Solid financial position
Key Highlights OFCF-CAPEX-NFP (FY10 vs. FY11)
578
OFCF CAPEX NFP(cash)
OFCF CAPEX
582
FY11FY10
556
417493
86
Organic € mln Organic € mln
Reported € mln
NFP(cash)
+19.2%excl. PPA
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
4
2011 HighlightsMobile Customers(1)
KPI’s Service Revenues & VAS(1)(3)
12.6
14.5
16.3 16.9 17.4 17.8 18.2
2008 2009 1Q11 2Q11 3Q11 4Q11e
MarketShare(2)
mln, %
29.4%30.6%
32.1% 32.9% 33.2%33.5% 33.6%
2010
Outstanding performance in postpaid segment
~ 2/3 net adds where post-paid in 4Q11
Smartphone leadership retained
~57% share of YoY net adds
16% ARPU growth YoY
3G devices represent 17% of base
VAS reached 50% of service revenues in 4Q11
Brand restyling timed to introduction MNP
103 101 102 99125
222 299322
4141
44
51
2008 2009 2010 2011
MOU SMS ARPU (pesos)
+34% +46%+55%
+17%+24%
+30%Bln, ARS
1.7 2.3 3.45.3
4.14.5
5.1
5.75.8
6.88.5
11.0
2008 2009 2010 2011VAS revenues Non-VAS revenues
+10%+13%
+13%
(1) Argentinean Operation only (2) Estimated data not available for 4Q2011 (3) Net of Intercompany
VAS includes: SMS, MMS, SMS revenue sharing, Contents, Mobile internet & othersFigures are in Argentina GAAP, with no material difference in terms of growth under IFRS for 2009, 2010 and 2011.
Mobile Business
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
5
2011 HighlightsFixed & BB Access
BB ARPU & Churn BB/Fixed Lines
Fixed Business
FixedVoice
Fixed BB
MarketShare (1)
Total Lines in market (In millions)
1.031.21 1.38 1.41 1.46 1.51 1.55
4.01 4.06 4.11 4.11 4.12 4.13 4.14
47% 47% 47% 47% 47% 47% 47%
2008 2009 2010 1Q11 2Q11 3Q11 4Q11e
Launch of Video Streaming services
Bundling & new serviced reduces churn to a record low
Regulated services down 3 p.p. to 41% of fixed revenues
Fixed ARBU up 7% despite frozen tariffs
Internet & Data revenues rose 28% & 23% YoY respectively(Arg GAAP)
Customers value flat pricing offers
Increasing residential bandwidth offers to improve customer
experience and provide new services
57
67 7687x
2.0% 1.8% 1.4% 1.2%
2008 2009 2010 2011
ARPU (in Pesos)CHURN (monthly)
2011
37%
2010
34%
2008
26%
2009
30%
(1) Estimated, data not available for 4Q11
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Agenda
6
BU Argentina 2011 Results (IFRS)
Telecom Argentina Plan
Take-Aways
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
7
Business EnvironmentMacroeconomic Context Competitive & Regulatory Framework
2008 2009 2010 2011e
6.8%
0.9%
9.2% 8.9%
GD
P G
row
th
(con
stan
t pri
ces)
Among the fastest growing economy in 2011
Private consumption driver of growth
High commodity prices sustained exports
Public spending fostered household income but reduced fiscal surplus
Growth expected to be lower but still positive
Tight fiscal and monetary policies could slowdown the economy
These measures shall probably deliver a healthier economic environment
Source: INDEC
Regulatory topics:
Implementing MNP next March
Upcoming Spectrum auction for 850&1.900 Mhzfrequencies
Expecting 1.700&2.100Mhz announcement
Launch of Video Streaming services due to legal restrictions to offer Pay TV
Competitive landscape:PenetrationMarket Share
Leaders in post-paid & Smartphone sales
Brand Restyling timed to MNP schedule
34%MOBILE 135%
35%*FIXED BROADBAND 45%
FIXED VOICE 47% 67%
Bundling and new products reduce churn
Increasing speed for new services and quality
Lines in service maintain growth
Customers value Flat Pricing
Business
* M/S on top 3 operators
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
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ARPU
(ARS per month)
Mobile Lines
(Millions)
Action Plan
Goals Outlook (1)
16.3
18.2
44
51
2010 2011 2014
2010 2011 2014
Mobile Business: Main Goals and Action Plan
Consolidate Revenue Share
Upgrade 3G network, capacity, quality and coverage
Mobile internet massification through convenient pre-paid packaging offers
Bundled data + social network plans
Loyalty targeted customer care programs ahead of mobile number portability
(1) Argentinean Operations only
Cagr ‘11-’14~+4%
Cagr ‘11’14>+10%
Promote Mobile Data and Social Networking
Improve Customer Experience
Consolidate Leadership of Youth Segment
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
9
Fixed Business: Main Goals and Action Plan
Action Plan
Goals Outlook (1)
Improve Value of the Household Consumer
Focus on Bundled Voice, BB+Mobile Internet, Streaming
Integrate Connectivity with Hosting and Cloud Computing
Promote Migration to Flat Pricing
Optimize Interconnection with Third Parties
1.4
1.6
2014
Cagr ‘11-’14>+5%
7687
2011
Cagr ‘11-’14>+12%
(1) Argentina Operation only
ARPU
(ARS per month)
Fixed BB Lines
(Millions)
2010 2011
2010 2014
Develop ICT market
Reduce Service Provisioning Time
Upgrade Bandwidth Delivery Capability
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
10
CAPEX PlanCapex (ARS, in billions) Key Drivers
Capex as % of Revenues
17%
3.2
2011 2012
18%
4.0
Manage E2E Service Delivery and QualityStandards
Improve Network Capacity and FaultTolerance to enhance user experience
Deploy FTTC to upgrade Access Bandwidth
Deploy low visual impact radiobase sites tofacilitate extension of mobile accesscoverage and capacity
Extend own network reach to reduce costs ofdomestic roaming
Deploy content delivery capabilities in thecore network.
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
11
BU Argentina 2011 Results (IFRS)
Telecom Argentina Plan
Take-Aways
FRANCO BERTONE
Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
12
Take-aways on main Telecom Argentina Trends
Revenues
2011 2012
Positivedouble digit
yoy trend
Upselling to the existing Customer Base is a major growth factor.
Customer Base growth rate shall contract to single digit.
Mobile Data and Social Networking are growth key drivers.
Ebitda Focus on cost efficiencies to mitigate cost inflation effects.
Reduce Interconnection and Domestic Roaming costs.
Improve Churn Rate to control SAC/SCR 2011 2012
Positivedouble digit
yoy trend
Capex
Focus on E2E Quality of Service.
Deploy FTTC and Content Delivery Network to upgrade access and core network bandwidth.
SAC/SRC capex impacted by MNP 2011 2014
Spending up,Capex on Sales down
Organic