Telecom Italia

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Telecom Italia Spa
Industry Telecommunications
Founded 1994
Founder IRI - STET
Headquarters Rome, Italy
Key people
Giuseppe Recchi (Chairman)
Marco Patuano (CEO)[1]
Products DSL services, mobile telephony
Revenue €21.57 billion (2014)
€4 billion (2014)[2]
Number of employees
66025 [2]
Subsidiaries TIM, TIM Brasil, Olivetti, Telecom Italia San Marino, Telecom Italia Media (67%),Telecom Italia Sparkle,

Telecom Italia is an Italian telecommunications company which provides telephony services, mobile services, and DSL data services. It was founded in 1994 by the merger of several state-owned telecommunications companies, the most important of which was Società Italiana per L'Esercizio Telefonico p.A., (known as SIP, from the earlier Società Idroelettrica Piemontese), the former state monopoly telephone operator in Italy.[3]

The company's stock is traded in the Borsa Italiana.


1925–64: Stipel company and early mandatory phone tax[edit]

Geographical division of the 5 companies in 1925

In 1925, the phone network was reorganised by Benito Mussolini cabinet and Stipel company was established in the same year. The original core of Telecom Italia includes also 4 more different companies: TIMO, Teti, TELVE and SET. Each of them worked in a specific geographical area.[4] It was in 1964 that these companies merged in one single group, under the name of SIP.

1964–94: SIP company[edit]

SIP, the former company name, was founded in 1964. It was run by the Italian government, Ministry of Treasury. SIP is the short name for Società Idroelettrica Piemontese. It was the unique phone network monopolist in Italy from 1964 to 1996 and Italian people had to pay the "Canone Telecom" (Mandatory Telecom Tax of about €120 per year plus hardware and bills) in order to have a phone at home.

1994–2005: Telecom Italia, Telecom Italia Mobile and DSL services[edit]

Telecom Italia was officially created on 27 July 1994 by the merger of several telecommunication companies among which Sip, Iritel, Italcable, Telespazio and Sirm.[5][6] This was due to a plan of reorganization of the telecommunication sector presented by IRI to the Minister of Treasury.

In 1995 the mobile telephony division was spun off into TIM (Telecom Italia Mobile). Interbusiness, Italy’s largest Internet network, was created and in the same period with TIN (Telecom Italia Net) and the first ISPs, Internet became a reality in Italy too.[7] In 1996, TIM introduced a new prepaid rechargeable phone card [8] (GSM) and one year later launched the short messaging service (SMS) capability.In 1997, under the chairmanship of Guido Rossi, Telecom Italia was privatised and was transformed into a large multimedia group.

In 2001 the company had a lot of debts and, in the same year, the company was bought by Marco Tronchetti Provera. The year after, in 2002 the Group released its DSL Flat service in Italy, Alice ADSL, with a download speed of 32 kbit/s and an upload speed of 8 kbit/s for €40/month plus a monthly based tax of €14.57, the "Canone Telecom", besides the mandatory monthly bills for the home telephone numbers (without a home telephone number you couldn't get the ADSL service). Telecom Italia Media, the multimedia company of the Group born in 2003 from Seat Pagine Gialle, focused its business on television sector with La7 and MTV channels.[9]

After the reorganization of editorial activities, in 2005 Telecom Italia acquired and Virgilio from Telecom Italia Media.[10] The Telecom Italia Group also operates in South America: in Brazil as TIM Brasil, and in Argentina and Paraguay with Telecom Argentina Group. TIM Brasil has its Brazilian headquarter in Rio de Janeiro.[11]

2005–14: Telecom Italia Spa bought by Telefónica[edit]

Telecom Italia in the world: Italy, Brazil and Argentina are the strategic markets where the Telecom Italia Group operates (dark blue).

Telecom Italia had bigger debts in 2005, and, one year later, CEO Marco Tronchetti Provera resigned.[12]

In 2007 the company was bought by "Telco" (composed by Telefónica and several Italian banks).[13] Telefónica currently owns 46% of Telco, the holding company that controls 22% of Telecom Italia.

In late 2013, Telefónica announced its intention to acquire the entirety of Telco by January 2014, potentially becoming Telecom Italia's largest shareholder. The plan, however, is being challenged by the Brazilian competition authority since Telefónica and Telecom Italia, with Vivo and TIM respectively, are the two largest telephone companies competing in Brazil.

National fraud in Brazilian prepaid mobile lines[edit]

On 8 August 2012, TIM Brasil became involved in a massive scandal in Brazilian news after the release of report by the Brazilian National Telecommunications Agency Anatel.[14]

The report points that on TIM's prepaid voice plan (24.7% market share), called "Infinity" (in which the user pays roughly US$0.12 for each unlimited time call), the calls were intentionally dropped by the company, forcing the customers to make (and pay for) new calls to keep talking. In just one day, 8.1 million calls were dropped and the total profit was approximately $2 million. Upon release of the report, the Public Ministry of the Paraná State filed a lawsuit against TIM asking that it stop selling new mobile lines in Brasil and pay a multimillion-dollar fine for the damages against consumers.[15]

2015: Rebrand[edit]

In 2015 Telecom Italia Group started a rebranding process of the telephony and mobile branch under the single TIM brand.[16]

In the same year, the Board of Directors approved the new company's division, the Infrastrutture Wireless Italiane, or INWIT, which operates 11,500 wireless towers.[17][18]

It was revealed in October 2015 that shareholders Vivendi would raise their stakes further in the company from its current level of 15.49%.[19]


Registered office of Telecom Italia in via Gaetano Negri, 1, 20123, Milan, Italy

The Telecom Italia Group provides phone landline services and mobile services in Italy, GSM mobile phone services in Italy and Brazil through its TIM subsidiary, (TIM Brasil), and DSL internet and telephony services in Italy and San Marino. It also operates in international telecommunication services, for other operators and corporations, through its subsidiary Telecom Italia Sparkle. In 2013, the total amount of the company's debt is about 26 billions €.[20]

Telecom Italia controls also Olivetti, a manufacturer of computer peripherals and mobile phones. On March 31, 2014, Telecom Italia leads both the direct fixed access lines market with 62,0% and the mobile “postpaid” segment with 45% of market share. In the mobile “prepaid” segment Telecom Italia owns 31,5% of market share together with Vodafone.[21]

After the merger of Wind and 3 Italia, approved on August 6, 2015, Telecom Italia is now the second country’s largest carrier with 30 million costumers, followed by Vodafone (25 millions),[22] but it preserves its leadership on the direct fixed access lines market and the mobile “postpaid” segment.[23] Telecom Italia has 66,025 employees.

Financial figures[edit]


At 31 December 2012 Telecom Italia Group had revenues for 29,503 million euros, 11,645 million euros of EBITDA, 1,627 million euros of debt and a capital expenditures of 5,196 million euros. The net financial debt was 28,274 million euros.[24]


In 2013 the Group had revenues for 23,4 million euros, 9,54 million euros of EBITDA, 2.71 million euros of EBIT and 2.71 million euros of debt.[25]


In 2014, it had revenues for 21,57 million euros, 8,79 million euros of EBITDA, 4,53 million euros of EBIT and a net profit of 1,35 million euros.[26]


From August 2015, Telecom Italia Spa competes, in the same market, with the new company formed by 3 Italia and Wind, and Vodafone.[27]


In 2002 Telecom Italia subscribed to the United Nations corporate responsibility initiative Global Compact.[28] It is also member of a number of stock market indexes which include companies focused on corporate social responsibility, including the Dow Jones Sustainability Indexes and those administered by FTSE Group's FTSE4Good. Its part-owned Brazilian subsidiary, TIM Participações, is listed in the Bovespa's ISE (Índice de Sustentabilidade Empresarial) index.[29]

The Company continues to promote a sustainability strategy including both environmental and social issues: on June 2014 it signes an agreement with A2A to buy energy only from renewable sources.[30]

See also[edit]


  1. ^ Lepido, Daniele (December 19, 2014). "Telecom Italia Said to Favor All-Stock Bid for Tim-Oi Merger". Bloomberg News. 
  2. ^ a b "COMUNICATO STAMPA" (PDF). Retrieved 19 August 2015. 
  3. ^ Telecom Italia Mobile S.p.A. History
  4. ^ Economics and politics of telecommunications
  5. ^ Telecom Italia history on official site
  6. ^ News archive on
  7. ^ News archive on
  8. ^ The economics of mobile telecommunications page 45 reference #50
  9. ^ Telecom Italia Media official site
  10. ^ News archive on IlSole24ore
  11. ^ TIM Participações S.A.
  12. ^ Pirelli as manager and investor in Telecom Italia (2001-2007)
  13. ^ Telefónica Gets Controlling Stake in Telecom Italia
  14. ^ "G1 – TIM derruba os sinais de clientes de forma proposital, aponta relatório – notícias em Paraná". Retrieved 2012-08-17. 
  15. ^ "G1 – Ministério Público pede a suspensão de venda de chips da TIM no Paraná – notícias em Paraná". Retrieved 2012-08-17. 
  16. ^ "Telecom Italia Group: 2015–2017 strategic plan approved, cumulative investments planned totalling around 14.5 billion euros over the three year period". Telecom Italia. Retrieved 2 April 2015. 
  17. ^ Aycock, Jason (5 June 2015). "Telecom Italia gets OK for towers IPO, values it at €2.34B". Seeking Alpha. 
  18. ^ Lennighan, Mary (5 June 2015). "Telecom Italia gets regulatory OK for €1bn towers IPO". Total Telecom. 
  19. ^ "Exclusive: Vivendi moves to raise Telecom Italia stake to around 19 percent - sources". Reuters. 1 October 2015. 
  20. ^ Costanza Iotti. "Telecom, Patuano prepara la guerra a Fossati. In ballo c'è uno stipendio da 1 milione - Il Fatto Quotidiano". Il Fatto Quotidiano. Retrieved 21 April 2015. 
  21. ^ "Osservatorio Trimestrale sulle Telecomunicazioni". 
  22. ^ The merger Wind-3 Italia may unlock convergence opportunities
  23. ^ Tlc, nozze tra Wind e 3 Italia. Fusione da 6,4 mld per il nuovo leader del mercato mobile
  24. ^ Annual Report 2012
  25. ^ Bilancio Telecom Italia S.p.A. al 31.12.13
  26. ^ Risultati finanziari 2014
  27. ^ Hutchison Talks Over Italy Mobile Merger Said to Accelerate
  28. ^ "Sustainability Report 2009" (PDF). Telecom Italia. Retrieved 2010-07-27. 
  29. ^ "Notice Bovespa ISE". TIM Participações S.A. Retrieved 2013-04-29. 
  30. ^ Telecom Italia signs an agreement with A2A to buy energy only from renewable sources

External links[edit]