Brazil helps Telecom Italia to meet expectations

MILAN: Telecom Italia (TIM) broadly met forecasts with its second-quarter core earnings on Thursday as its Brazilian business offset stalling growth and tougher competition in the domestic market for Italy's biggest phone group.

The former monopoly, whose shareholders include French company Vivendi and investment group Elliott, also confirmed its guidance for the next three years.

TIM said its organic earnings before interest, tax, depreciation and amortisation (EBITDA) fell 2.6% to 1.9 billion euros, matching an analyst consensus provided by the company.

Revenues in the quarter fell by 0.4% to 4.5 billion euros, marginally below expectations of 4.55 billion euros.

Domestic sales fell by 3.4% to 6.704 billion euros in the first six months of the year.

TIM's Brazilian subsidiary this week posted a 26% rise in second-quarter net profit, beating market expectations.

TIM's net debt at the end of June fell to 24.7 billion euros, a reduction of 539 million euros compared with the end of last year.

TIM has signed a non-disclosure agreement with Open Fiber owners state lender CDP and utility Enel to kick off talks on ways of integrating its fiber optic network with their venture, including a possible merger.

The head of Enel, Francesco Starace, said on Thursday that he was prepared to take his time to work on a broadband deal but that it was a goal worth pursuing.

"Anything that speeds up and makes more efficient the cabling of the national system is welcome and I think could create value for all the shareholders," Starace said as Enel presented its results.