Telecom Italia reports profit slump, Sparkle fine fund

Telecom Italia announced a 27-per cent drop in earnings for 2009 yesterday and set aside €507 million for fines and taxes pending the result of a probe into its Sparkle subsidiary for fraud. Telecom Italia said in a statement its earnings shrank by...

Telecom Italia announced a 27-per cent drop in earnings for 2009 yesterday and set aside €507 million for fines and taxes pending the result of a probe into its Sparkle subsidiary for fraud.

Telecom Italia said in a statement its earnings shrank by 27.4 per cent to €1.58 billion in 2009, dampening growth prospects.

It now forecasts one per cent growth for the 2010-2012 period, compared with a previous growth estimate of two per cent for 2009-2011.

Telecom delayed the publication of its full 2009 financial results twice this year because of the probe in which Telecom Italia Sparkle and Fastweb, another telecom operator in Italy, are implicated in an alleged tax fraud and money-laundering operation. The €507 million fund was set aside in case a court orders Telecom Italia to pay fines or unpaid taxes.

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