Telecom Italia’s small shareholders are calling for the operator to merge its Brazilian unit TIM Partecipacoes with fellow operator Oi rather than selling it outright.
Asati – a shareholder group comprised of 6000 small investors holding a collective 1% stake in Telecom Italia – has expressed its opinion that the operator must not undervalue TIM.
Oi has previously expressed interest in acquiring TIM Brasil, which is considered a likely target for consolidation in the Latin American country. It was recently reported that Oi had lodged a joint bid for Telecom Italia’s Brazilian unit with rivals Claro and Vivo, although the integrated operator denied this.
While TIM’s Q3 results saw an increase of 10.6% in net profit (up to BRL348.3 million), its revenue was down 4.1% to BRL7.2 billion. Mobile revenue dropped by 3.4% to BRL5.8 billion.
TIM noted that the downturn had been “observed for the industry as a whole” and was primarily affected by declines in SMS and mobile termination rates. Its outgoing voice and data business grew by 2.1%, although a decline in subscriber rates was blamed on “already high penetrated market, people using multiple SIM-cards and, a less dynamic economic environment”.
This to some degree could be assuaged by consolidation. Growth could also come from encouraging subscribers to adopt postpaid services in a market dominated by prepaid customers.