Telecom Italia CEO Marco Patuano shifts focus to Capex innovation

Telecom Italia CEO Marco Patuano said its focus of Capex (capital expenditure) on innovation is resulting into better customer experience.

The company said the portion of innovative Capex in Italy was 26 percent of the total Capital spending in the first half of 2014.

“Innovative Capex represents a key area to which we’re assigning full priority also in terms of technical solutions, passive network-sharing and procurement management. Our ultra-broadband coverage has materially increased this quarter as I already briefly mentioned and as this slide summarizes,” said Telecom Italia CEO Marco Patuano.

Telecom Italia shifts Capex to innovation

The mobile service provider said its total Capex declined 14.5 percent to €1,023 million euros in the second quarter of 2014.

Out of this, Capex in Italy dipped 10.9 percent to €684 million, while Capex for Brazil decreased 19.6 percent to €337 million. Capex for Italy was 67 percent of its total Capex.

“The reduction in Capex in Italy was due to traditional investments and led to certain platforms being abandoned and a number of industrial processes being simplified. These savings were partly redirected to developing next-generation networks such as LTE and fiber network,” Patuano added.

Telecom Italia Capex for H1 2014

In Brazil, Telecom Italia is focusing on the development of infrastructure for improving the quality of service.

Telecom Italia said 83 municipalities were covered with fiber, 60.5 percent population reached by LTE in Italy.

In Brazil, the company covered 66 cities by mobile BB project by adding 13 cities as compared with the first quarter of 2014.

Telecom Italia said network Capex in Italy increased by €30 million in the first half primarily due to plus €80 million in its innovative portion, showing a 47 percent increase year-on-year and at the same time, a minus €50 million in traditional network Capex coming from progressive network delayering in other savings.

Telecom Italia in Brazil

Patuano said accelerating on innovative network Capex is the key element of strategy.

In Italy, they account in the first half 2014 for 34 percent of the total network Capex and 26 percent of the total Capex.

Telecom Italia said its NGN expansion has now covered 83 cities, three times more than main rival on fiber. LTE rollout has reached more than 60 percent of the population.

TIM is moving rapidly towards our 2016 ultra-broadband targets of more than 50 percent in fixed and more than 80 percent in mobile.