Telecom Italia (TIM) is hoping to cut customer service costs and grow subscriber numbers through a new strategic plan, as it revealed revenues rose, but earnings fell last year.
TIM saw group sales rise 2.7 percent year-on-year to €19.8 billion in 2017, buoyed by its home market where revenues rose 2.3 percent to €15.35 billion on the back of the growth in its customer base, maintenance of ARPU levels as well as increased penetration of high value broadband services such as fibre and LTE, digital services and ICT.
Revenues also rose in Brazil, up 11.2 percent to €4.5 billion, as rising services revenues offset falling product revenues.
Across both markets the company added 2.94 million customers, taking its total subscriber base to 113.5 million.
However, rising revenues and customer numbers could not prevent a 3.7 percent fall in organic EBITDA to €7.8 billion, which were in part blamed on non-recurring charges.
The mixed results came as TIM unveiled its new strategy for the years 2018 to 2020, titled DigiTIM.
This will see a newly created “Transformation Office” overhauling the management structure and IT assets at the company.
The operator also promised to reduce silos and layers of hierarchy within the organisation, while offering managers a new long-term incentive programme based on share performance and free cash flow to equity generation.
It will also replace its IT infrastructure to create a single interface for customers offering omnichannel interaction.
The objective is to increase the number of users of self-care apps to 85 percent of its customers and reduce human-operated interactions with customers by 30 percent, TIM said.
In addition, the operator plans to increase its use of big data and analytics to better serve its customer base and find new growth opportunities.
The second major aspect of the plan will focus on using video, music and gaming content to grow its fixed, TV and mobile subscriber base.
The operator said it will sign partnerships with national and international players to obtain and produce content.
It claimed this strategy would help it to boost subscribers to its TIMVISION TV offering from 1.3 to 3.9 million and its residential ultra broadband customers from 1.8 million to over five million.
The plan will also see TIM’s enterprise arm aiming to increase its ICT and cloud revenues and look to converge its fixed, mobile and IT offerings.
Meanwhile, the wholesale business will look to use digital and automation tools to improve efficiency and return to growth, while tower business Inwit will look to reach a tenancy of 2.1 customers per site.
The announcements came as TIM’s board granted CEO Amos Genish the power to proceed with his plans to spin off its fixed network, trailed last month.
The move will create a legally separate but fully TIM-owned wholesale division called Netco, which will own and operate TIM’s access network.
In a statement the operator said the project is “the most advanced network separation model in Europe”.