Tlc, global revenues up but Europe lags behind and slows investment
On the Old Continent, the overcrowding of players in the sector weighs heavily. Only one European group in the global top 10: Deutsche Telekom
The survey by Mediobanca's Study Area on the large telecommunications groups - 34 realities at global level with a turnover in excess of 9 billion euro - still highlights the problems weighing down the sector, particularly in the Old Continent, where revenues are more stagnant and the competitive arena overcrowded. In Europe, with a population of 593 million, there are 34 infrastructure operators and more than 350 virtual operators; in the US, with a population of 340 million, there are only three operators and around 70 virtual operators; in China, with a population of 1.4 billion, there are four operators and around 15 virtual operators.
The latest trends
In the first half of this year, global turnover increased by 2.9%, while growth in Europe was only 1.1%. Chinese operators slowed their pace on the revenue front (+0.4%), but improved their operating profitability by 5.6%. The aggregate net operating margin rose by 5.3%, but with large differences: +10.3% in Asia Pacific, +4% in the Americas, -3% in Europe, where, however, the figure is influenced by Orange's agreement to manage jobs and career paths aimed at supporting the evolution of roles and skills and accompanying employees in declining roles towards new opportunities. Excluding Orange, the Mon of European telcos would be up 4.2%.
During the six-month period, investments increased by 1.8 per cent, with peaks of 12.3 per cent in Japan and 6.6 per cent in the US, while they contracted by 0.4 per cent in Europe, despite the fact that 5G coverage is still lagging behind: only 2 per cent of the population is in a position to use 5G exclusively.
Last year the European telco sector had already shown signs of slight improvement. In 2024, Germany remained the leading market by revenue with EUR 61.1bn (+2.2% on 2023). Italy ranks fifth with EUR 28bn in revenues, up 3.4% on 2023, but down 2.2% on 2020. The Ebit margin (16.3% the aggregate average) was higher for Deutsche Telekom, which is at 21.2% on revenues of EUR 115.8 billion. The German company, which originates two thirds of its revenues in the USA, is the only European telco in the top 10. Unmatched, however, are the margins of India's Bharti (32.2%), which dominates the profitability ranking.
The semester in Italy
In the first half of the year, the domestic revenues of the main Italian operators grew by 1.6%. Iliad Italia's performance was strong (+9.2%). Tim's domestic unit was up 1.6% compared to 2.7% for the group, with Brazil and Tim enterprise up 4.8% and 4.7% respectively. Tim's Italian business generated 10.1 billion in revenues last year (+1.5% on 2023), ahead of Vodafone (4.9 billion), Wind Tre (4 billion), Fastweb (2.8 billion). Iliad was sixth with 1.2 billion preceded by FiberCop, the former Telecom network company with 2.6 billion.
