Wind Italy Sees Revenues Drop Due to Competitive Pressures

                               

Wind Italy has reported that it first quarter revenues fell as the market was marked by intense price competition.

Total revenue in 1Q14 decreased 7% YoY to EUR 1.14 billion, driven by the 10% reduction in service revenues, primarily due to the intense competition in the mobile segment coupled with the tail end impact of the MTR reductions. Net of the MTR reductions, total revenues declined by 5%.

In the first quarter of 2014, Wind's mobile customer base remained flat at 22 million.

Mobile ARPU declined 12% to EUR 11 driven by the decline in voice ARPU caused by the 2013 competitive pressure coupled with the increased number of "data only" SIM cards. Mobile data ARPU increased 2% YoY and now generates 38% of total mobile ARPU.

In fixed-line, service revenue decreased 8% YoY to EUR 306 million mainly due to the decline in the fixed-line customer base, primarily in the less profitable indirect segment, as a result of the focus on higher margin LLU customers, and due to the ongoing decline in voice volumes and revenue. Fixed broadband revenue increased 2% YoY to EUR 138 million with broadband LLU customers and dual play customers growing 1% YoY. Fixed EBITDA margin increased driven by the focus on the LLU segment and the use of more efficient pull distribution channels.

During the first quarter, Wind continued to invest in increasing the capacity and coverage of its existing HSPA+ network, as well as expanding its 4G/LTE services in the main cities and the main Italian airports. As a result, 1Q14 CAPEX was EUR 137 million.