Telecom Italia looks to TIM Brasil to drive future growth
Mobile broadband at the heart of debt-laden operator’s plan for recovery
Telecom Italia's focus on its Italian and Brazilian mobile operations is an acknowledgement that next generation mobile services could be a major factor in Telecom Italia's recovery from its current financial situation. Far from seeing TIM Brasil as a disposable asset - as some reports in the Italian media have suggested - Franco Bernabe rightly sees TIM Brasil as a key revenue generator for the group moving forward. However, the success of mobile broadband in the country will be dependent on how quickly TIM Brasil can build-out its new high-speed network. As the parent group has committed to lowering capex over the next three years (from 15% of revenues today to 13% by 2011), TIM Brasil could struggle to reach its 80% population coverage target for 3G. Success in mobile broadband in Brazil will also depend on delivering flexible tariffs and a wide portfolio of compatible devices. Meanwhile, in Italy - where mobile broadband is well advanced - TIM must be careful not to cannibalise its existing fixed-line broadband business with mobile broadband.