Telecom Italia S:p.A.: 2014-2016 STRATEGIC PLAN APPROVED
07 November 2013 - 9:51PM
Italian Regulatory (Text)
PRESS RELEASE
TELECOM ITALIA: 2014-2016 STRATEGIC PLAN APPROVED, 3.4 BILLION
EUROS IN INNOVATIVE INVESTMENTS IN ITALY FOR NGN, LTE AND CLOUD
COMPUTING COVERAGE ACCELERATES: BY THE END OF 2016, OVER 50% OF THE
POPULATION WILL HAVE ACCESS TO FIBRE AND 80% TO 4G EQUIVALENCE OF
INPUT TO START FOR THE ACCESS NETWORK TELECOM ARGENTINA: OFFER
RECEIVED; BOD MANDATES MANAGEMENT TOCOMPLETE THE DEAL ISSUING BY TI
FINANCE S.A. OF MANDATORY CONVERTIBLE BONDS UP TO A MAXIMUM OF 1.3
BILLION EUROS VALUATION OF TOWERS IN ITALY AND BRAZIL, AND OF THE
TI MEDIA MULTIPLEXES. GUIDANCE 2014-2016: STABLE EBITDA AND
REVENUES SHAREHOLDERS MEETING CONVENING FORTHCOMING
Milan, 7 November 2013 The Telecom Italia Board of Directors,
chaired today by Aldo Minucci, has approved extraordinary
transactions to strengthen the financial position of the Company to
support the 2014-2016 three-year Industrial Plan that sets out
major objectives for the development of new infrastructures and
innovative services, through requalified and increased investments,
at a much faster rate than under the previous plan. The CEO Marco
Patuano stated: "The Plan for the three year period 2014-2016
envisages some extraordinary transactions intended to strengthen
the Group. These will allow us to boost development of
ultrabroadband and accelerate our converging business strategy, and
to achieve greater financial flexibility, preparatory to our
achieving metrics over the life of the plan that are coherent with
"investment grade" status. Therefore the Plan also includes support
measures to strengthen the financial position of the Group which
will contribute approximately 4 billion euros, in total. These
actions include issuing of mandatory convertible bonds for a
maximum of 1.3 billion euros; the disposal of the stake in Telecom
Argentina; the valuation of the towers in Italy and Brazil and of
the TI Media multiplexes.
We are firmly convinced that this is the best strategic and
industrial choice to pursue a path of growth and development."
ACCELERATION OF ULTRABROADBAND COVERAGE IN ITALY AND BRAZIL In
Italy, the plan envisages investments of approximately 9 billion
euros over three years, of which 3.4 billion euros solely for
latest generation: 1.8 billion euros for the development of fixed
ultrabroadband using optical fibre for the access segment; 900
million euros for mobile ultrabroadband; approximately 700 million
euros for the creation of new data centres dedicated to the
development of cloud computing and international fibre connections.
This increase in innovative investments, which will reach 50% of
the total in 2016, will give great impetus to the development of
both fixed and mobile ultrabroadband, rolling out the two
technologies faster than in the preceding 2013-2015 plan: by 2016
NGN will reach over 50% of the population, with 12.4 million homes
'connected'; mobile LTE will cover 80% of the population, with a
great contribution towards achievement of the objectives of the
European Digital Agenda. In Brazil, the traditional voice-based
component continues to be valued, while at the same time the data
segment is accelerating through the development of 3G and 4G
infrastructures. Over the life of the plan the capex will exceed 11
billion reais. REGULATORY STRUCTURE FOR THE ACCESS NETWORK Given
this plan, which envisages an increase in investments in the new
generation network, with financial coverage that will be guaranteed
without the intervention of third party co-investors, the Telecom
Italia Board of Directors has decided to confirm the project for
voluntary separation of the access network, giving priority to the
creation of the "Equivalence of Input " (EoI) model through
functional separation, with particular reference to the offer of
unbundling of the local loop (ULL) and virtual unbundling local
access (VULA) for the new generation networks based on FTTCab and
FTTH architectures. In this way the Company will continue to
represent European best practice on equivalence issues. Whether or
not any spin-off operation should be undertaken will be assessed
after the consolidation of the Italian and European regulatory
framework, and in the light of any concrete manifestations of
interest by investors in subscribing to the share capital of any
new entity. The dialogue with the Italian regulatory authority will
continue on this new basis. TELECOM ARGENTINA The BoD has received
an offer for its direct and indirect stake in Telecom Argentina.
The BoD has given management authority to finalize the transaction
at the terms that management believes are in the best interest of
the Company.
ISSUING OF MANDATORY CONVERTIBLE BONDS The Board guaranteed the
issuing by subsidiary TI Finance S.A. of two series of mandatory
convertible bonds into ordinary or savings shares of Telecom Italia
S.p.A. up to a maximum value of 1.3 billion euros. See the specific
press note for more details. GUIDANCE 2014-2016 The Group financial
guidance in the 2014-2016 Plan is as follows: Revenue CAGR 2013-16:
stable EBITDA CAGR 2013-16: stable Cumulative Capex 2014-16, less
than 14 billion euros Net Debt to EBITDA ratio of 2:1 at 2016
(including equity strengthening for more than 1bn
SHAREHOLDERS' MEETING The Board of Directors considered the request
to call a Shareholders' Meeting submitted by shareholder Findim
Group S.A., issuing a mandate for the prompt call of a meeting of
the shareholders to discuss the proposal to revoke the mandates of
the majority of serving Directors. If the revocation proposal is
approved, the Shareholders' Meeting will make provision for the
renewal of the Board by a slate voting system after determining the
number of directors, the duration of their mandate, and their
remuneration. If, however, the revocation proposal is not approved,
the Shareholders' Meeting will be called on the add to the serving
Board of Directors (whose mandate will expire with the approval of
the financial statements at 31 December 2013) by appointing two
Directors to replace the two who resigned, Franco Bernabè and Elio
Catania. For this purpose, the Board proposes Angelo Provasoli as
replacement for Mr. Catania. He was co-opted on 3 October 2013, and
qualifies as an independent director. A second director has not yet
been co-opted. In approving the assumption of the guarantee
commitments for the issue by Telecom Italia Finance SA of mandatory
convertible bonds, the Board of Directors has also issued a mandate
for the Shareholders' Meeting to be called in anticipation of the
resolutions to be passed that are functional and necessary for this
initiative (cancellation of the par value of the shares and
increase in the reserved capital to service the bond conversion).
FINANCIAL CALENDAR The calendar for the meetings to approve the
financial reports of Telecom Italia S.p.A for 2014 is as
follows:
6 March - Board of Directors meeting to approve the draft financial
statements for the year and the consolidated financial statements
at 31 December 2013. 16 April - Shareholders' Meeting to approve
the financial statements at 31 December 2013. 13 May - Board of
Directors meeting to approve the interim report on operations at 31
March 2014, 5 August - Board of Directors meeting to approve the
half-year financial report for 2014. 6 November - Board of
Directors meeting to approve the interim report on operations at 30
September 2014.
Any changes to the above dates will be communicated without
delay.
Telecom Italia Press Office
+39 06 3688 2610 http://www.telecomitalia.com/media
Telecom Italia Investor Relations
+39 02 8595 4131
http://www.telecomitalia.com/investorrelations
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