- Credit Suisse reinstates coverage of Telecom Italia (TI -0.5%) shares at Neutral, citing improvements in mobile pricing in Italy since the "very low levels of summer," which have raised expectations "of an inflection point in the performance of the domestic operations after several years of deteriorating trends."
- The caveat? "Pressure on the wirelines business is still growing ... with cord cutting slowly increasing as consumers gradually react to the mobile price cuts of the last 18 months." Analyst Justin Funnell notes that mobile plans with 200-550 voice minutes, SMS, and 1-2GB of data are priced at €10-€15/month, around half the estimated ARPU of TI's 6.5M voice-only lines.
- The firm believes TI recognizes the challenge, demonstrated by cuts to 2play prices for new customers.
- As for Brazil, although the "logic for mobile consolidation ... is strong ... the complexity of a potential deal suggests a lengthy timetable and uncertain outcome."
Credit Suisse weighs in on Telecom Italia with Neutral rating
Dec 24 2013, 11:51 ET