Telecom Italia SpA (TIIAY) (H1 2026) Earnings Call Highlights: Strong Underlying Growth and ...

Release Date: July 30, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• Telecom Italia SpA ( TIIAY ) confirmed its full-year 2026 guidance, citing confidence from disciplined execution and visibility on business trajectory.

• Underlying group EBITDA after lease grew 6.3% in the first half, excluding the temporary MVNO transition impact, demonstrating improved operating leverage.

• The company successfully completed the conversion of saving shares and a reverse stock split, simplifying its equity story and capital structure.

• Telecom Italia SpA ( TIIAY ) fully collected the reimbursement of the 1998 concession fee, strengthening its financial position and supporting solid cash generation.

• TIM Enterprise delivered its 16th consecutive quarter of growth, with cloud revenues up 18.1% year-on-year, highlighting the success of its digital services strategy.

• TIM Brasil continued its strong performance with revenue growth of 6% and EBITDA after lease growth of 5.5%, confirming its role as a key growth engine.

• The company has hedged around 80% of its expected energy consumption for 2026 and 50% for 2027, providing protection against potential price volatility.

• Telecom Italia SpA ( TIIAY ) maintained a stable leverage profile at 1.94x, reflecting continued financial discipline and a strengthened balance sheet.

Negative Points

• The MVNO transition created a temporary headwind, reducing first-half revenues by around EUR80 million and EBITDA after lease by approximately EUR84 million.

• Fixed net additions slightly worsened in the quarter, partly due to service quality issues experienced by its main wholesale fiber provider, FiberCop.

• The company noted a slowdown in fixed ARPU growth, attributed to a widening gap between front-book and back-book pricing due to competitive market pressures.

• Telecom Italia SpA ( TIIAY ) faces ongoing competitive threats from energy providers entering the telecom market, which could pressure customer retention and pricing.

• The company's plan does not factor in potential benefits from market consolidation or revisions to the MSA pricing framework, limiting upside potential in its projections.

• The spectrum renewal process remains uncertain, with potential cash outflows starting in 2029, and the final mechanism depends on Italian government decisions.

• The company's ability to provide a full midterm guidance update was constrained by the legal framework of the ongoing public tender offer by Poste Italiane.

• Brazilian market is becoming more mature, and recent price competition increases could impact future growth, requiring a strategic shift towards new revenue streams.

Q & A Highlights

Q: Can you provide more detail on the deterioration in service quality at FiberCop, and when will it improve? Also, what are you looking for in the FiberCop litigation and the INWIT negotiations? A: Pietro Labriola (CEO) and Andrea Rossini (Chief Consumer, Small and Medium Market Office) explained that the fixed-line market weakness is not structural but due to a slight deterioration in delivery and assurance by the network provider (FiberCop), which is affecting all operators, not just TIM. They are working with the provider to address this. On FiberCop litigation, the CEO stated the issue is about service quality, not pricing, and they want customers to enjoy ultrabroadband. Regarding INWIT, it is too early to comment on the legal proceedings, but the CEO noted that if a JV with Fastweb can build antennas at a lower cost, they are ready to give INWIT the right to match that, as long as it is rational and covers the cost of capital.

Q: Why did you decide not to give an update on your midterm guidance, and was it due to legal restrictions? Also, can you comment on the slowdown in broadband ARPU growth and the spectrum consultation? A: Pietro Labriola (CEO) clarified that the decision was due to the legal framework of the public tender offer, as they had to respect the timeline for the Board's opinion. He emphasized that the 2026 and 2027 guidance is confirmed, and the 2028 plan can be extrapolated from 2027 plus the declared synergies. On ARPU, Andrea Rossini explained that the slowdown is due to the dilution effect between the "front book" (new customer pricing) and "back book" (existing customer base), which is a result of their own success in upselling. On spectrum, the CEO was positive on the recent press release, as it aligns with their request for more investment commitments rather than a lump-sum payment, but noted "the devil is in the details."

Q: Does the recent AGCOM announcement give TIM more confidence to raise prices in the Italian mobile market? Also, can the Board revisit its recommendation if Poste's share price declines materially? A: Pietro Labriola (CEO) stated that Italy has the lowest mobile prices in the world, which is why they launched TIM Priority to offer more value. He referenced a GSMA report suggesting that moving from 4 to 3 operators is the only way to improve service quality without price increases. On the Poste offer, CFO Piergiorgio Peluso explained that the fairness opinion is based on conditions at the time of issuance, and there is no mechanism to revise it based on market fluctuations. The CEO added that the evaluation is fixed and cannot be revised during the tender offer period, and the market risk goes in both directions.

Q: Can you commit to increased network investment for spectrum renewal given the potential overlap with the INWIT migration? Also, what are your energy cost assumptions for 2027? A: Pietro Labriola (CEO) confirmed they can commit to increased investment, noting they have already reached the minimum commitment towards INWIT. He reiterated that if a JV with Fastweb can build antennas at a lower cost, INWIT has the right to match it, but it must be rational. On energy, the CEO stated they are hedged at 80% for 2026 and 50% for 2027, with a trading desk optimizing the timing of further coverage. He expressed confidence in reaching the guidance, citing their successful track record of being the least impacted player during the energy crisis.

Q: Can you clarify the assumptions behind the fairness opinions, specifically regarding growth from 2027 to 2030 and the share of synergies accruing to TI shareholders? A: CFO Piergiorgio Peluso explained that the fairness opinion assumes the transaction as defined in the offer document, including the reaching of the threshold by Poste. The underlying projections are based on the updated 2025-2027 industrial plan, extrapolated to 2030, and are fully compliant with the guidance. The advisers used standard methodologies (DCF, DDM, sum of the parts) and assumed the synergies communicated by Poste in the combined entity analysis. The CEO added that the plan does not factor in potential upsides like market consolidation, making it prudent and achievable.

Q: What is the expected incremental CapEx for spectrum renewal from 2029 onwards, and do you see the increased price competition in Brazil as temporary or structural? A: Pietro Labriola (CEO) stated it is too early to define the overall amount for spectrum renewal, as discussions with AGCOM and the Italian government are ongoing. He suggested a rational approach would be to transform the lump-sum cash-in into investments. On Brazil, the CEO noted the recent price competition is related to Claro's perception of increased promotions, and they will monitor the situation. He emphasized TIM Brasil's strategy to diversify into B2B, IoT, and IT services to derisk the business model.

Q: Can you provide comfort on the equity free cash flow target, which seems skewed to the second half? Also, is TIM willing to take part in the AI gigafactory project? A: CFO Piergiorgio Peluso explained that the second half is usually cash positive due to seasonality. He compared to 2025, where the second half had around EUR900 million of equity free cash flow, but was impacted by EUR200 million from the split payment VAT mechanism and EUR100 million from Isopension. Excluding these, the 2026 target is broadly in line. On the AI gigafactory, the CEO confirmed TIM is taking a look at the project with financial discipline, as they are the leader in Italy as a tech company, but noted they need more time to review the requirements.

Q: Can you elaborate on the specific issues with FiberCop's service quality and whether it is linked to their proposal to increase prices? A: Pietro Labriola (CEO) clarified that the deterioration is not related to pricing, as FiberCop's proposal to AGCOM was refused. He stated that the quality of installation and maintenance for customers is deteriorating, and this is a question that must be asked to FiberCop. He suggested applying the energy system where wholesale increases can be passed to customers. The CEO also noted that all operators are claiming about this issue, and TIM is paying for a service and expects the quality defined in the contract.

Q: What is driving the additional free cash flow generation in the second half of 2026 compared to last year? A:

For the complete transcript of the earnings call, please refer to the full earnings call transcript .