Domestic market hits Telecom Italia profits

Telecom Italia’s net profit was down in the first quarter, a company earnings report showed, with a boom in Latin America failing to make up for a decline of its domestic market.

Profits at the Italian giant dropped 8.7 per cent to €549 million in the first three months of the year – lower than the €559 million expected by analysts polled by Dow Jones Newswires.

After the integration of Telecom Argentina in October, Telecom Italia said its gross sales rose 3.6 per cent to €2.929 billion and turnover was up 10.3 per cent at €7.073 billion.

But in Italy, turnover fell 7.4 per cent and gross revenue dropped 7.6 per cent, with its mobile telephone market plunging 12 per cent.

Telecom Italia has refused to lower prices like its competitors in order to defend its margins and has suffered from a decline in fixed-line connections.

Marco Patuano, head of operations in Italy, told analysts that there should be “an improvement” in turnover for Italy in the second quarter)