Telecom Italia announced plans to invest €10 billion in its core business between now and 2017 to help the company return to profitability after unveiling its full year results.
The operator said the sum, which includes €5 billion dedicated to innovation, would enable the company to enhance cash flow and improve profit margins after sales in the final quarter of 2014 fell 4.1 percent to €5.6 billion.
However, this compared to a 9.1 percent decline in the first nine months of 2014.
In its home market, revenues were down five percent to €4 billion in Q4, with declines in excess of seven percent in both the consumer and enterprise business units.
Full year results saw revenues fall 7.8 percent to €21.6 billion, with sales down seven percent to €14.2 billion in the operator’s home market.
Like many of its peers, TI said revenue decline continued to lessen year-on-year but admitted a “structural weakness” still existed with regards to the Italian economy.
The operator recorded an LTE customer base of over 1.3 million and 231,000 fibre customers during the year.
Telecom Italia said it covered around 80 percent of the population with 4G, while fibre is now available in 131 cities.
Half a billion euros is to be invested in FTTH and FTTC technologies over the next two years as TI said it expected to have an additional one million fibre customers by the end of 2017.
Sales in Brazil decreased over 10 percent to €6.2 billion (€2 billion) as ARPU declined, while international wholesale revenues were down 1.5 percent to €1.2 billion.
The operator announced investments of R$14 billion (€4.3 billion) in its Brazilian subsidiary over the next two years, with the intention of turning its focus away from voice and SMS towards data-centric offerings.
Marco Patuano (pictured), CEO of Telecom Italia, said that the operator would continue to target a “rebound in profitability” in both Italy and Brazil.
EBITDA fell 7.9 percent to €8.8 billion last year as capex rose by almost €600 million to €5 billion.
Patuano said the figures were “a very encouraging signal of the direction [in which] we wish to go.”
He added: “The underlying plan is acceleration. We want to accelerate investment in Italy, we want to accelerate investment in Brazil, and we want to accelerate growth in Telecom Italia.
“We are not willing to stabilise EBITDA - we need to target a rebound in profitability, and this is something we’ll spend time on in both Italy and Brazil.”