Tim is not a company in disarray: in comparison with other European operators it does not come out as a loser

Tim, after the takeover bid launched by the American fund Kkr, it may change ownership. The interest in the “old” Telecom is always high, given the continuous “assaults”, only that each time they are operations not anchored to industrial logic but more to financial speculation. In this post I offer the reader some useful data to better understand the story.

The comparison with other European Telcos, according to a recent Mediobanca report, highlights a reality that is different from many clichés: Tim is anything but a company in disarray, has several problems but above all needs to be relaunched. The first thing to point out is that Tim it is relatively small compared to the other Telcos. In Europe it occupies the seventh place in terms of revenues, while worldwide it occupies the 17th place. “Small is beautiful” is a slogan that does not fit well on hyper-competitive and enlarged markets such as that of telecommunications.

Another point to note is that the major telephone companies belong to national entities, except Tim. Greater attention to the “Italian character” of our large companies should be the primary task of those who govern us and we hope that this aspect will now be taken seriously. A limitation of Tim is the lack of ability to expand abroad. The foreign turnover is equal to 23% of the total revenues, while for Deutsche Telekom 76%, Telefonica 71% and the French Orange 41%. Tim’s few foreign “forays” have been unsuccessful, as has happened in some countries in the East and in South America. A limit that Tim has been carrying around for years and which he cannot overcome.

It is not clear, for example, how it fails to have a strong presence in the Mediterranean area, where in theory he should “play” at home. When revenues have fallen by 20% in the last five years, it is imperative to expand your market perimeters. The comparison on productivity, measured by the added value per employee (ie the contribution of personnel to the creation of value) and the average cost per employee, does not see Tim succumb; rather, is in line with the major operators. Debt – other companies are in worse situations – is a burden that Tim should contain (for every eight euros of revenue, Tim pays one to the banks).

As can be seen from the comparison with other European operators, Tim is not a loser. Some argue that today’s difficulties are linked to the choice to support Dazn on the rights of the football championship. It might be true. On the other hand, the same experience of TimVision does not seem to have brought positive results. The longed-for “convergence” between networks and contents is only an illusion, a road to bankruptcy Telco. If even Rai and Mediaset, born to “make” television, succumb to Netflix, I understand hard to imagine that Tim could come out on top in the media competition.

It is impossible to predict how the climb on Tim will end. In these events, where the strategic assets of the country are touched (think of the question of the network), the national interest should emerge strongly. Who should protect him? The government. It is at Palazzo Chigi that you should decide what to do with Tim, a heritage of the country to be safeguarded. Decide whether there should be a single and public network, as was in the wishes of the previous executive, or a competition between multiple networks, a solution preferred by the current government but which the Tim-Kkr affair is questioning. The spin-off of the network from Tim to merge it into a mixed public-private company, leaving the profitable service activities to Tim, may be the preferred solution. The problem is always the same: find a balance between the interests of the country and those of the market.

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