Telecom Italia’s President Optimistic About TIM’s Financial Flexibility
Alberto Griselli, the president of TIM Brasil, expressed optimism on Thursday regarding the sale agreement of Telecom Italia’s physical network, the controlling company of the operator. He believes that this agreement could provide an additional boost for investments in the company in Brazil.
TIM is the main business of Telecom Italia and accounts for about 35% of the Italian group’s earnings before interest, taxes, depreciation, and amortization (EBITDA).
“Brazil is the group’s priority, the jewel in the crown,” Griselli told Reuters during an international event in Rio de Janeiro focused on innovation and technology. “We represent more than one-third of the EBITDA, and this will increase,” he added.
In late May, the American investment firm KKR received unconditional approval from the European Union for the acquisition of Telecom Italia’s fixed-line network in a 22 billion euro deal.
“With the KKR deal, for sure these 35% (of TIM’s contribution to Telecom Italia’s EBITDA) will increase in the new company configuration,” Griselli stated.
TIM typically invests around 4.5 billion reais in Brazil annually, and with potentially fewer demands from the controlling company, TIM may have more room to invest.
“The sale of the network abroad allows our parent company to deleverage; as they deleverage, we have more flexibility in the capital structure here and, therefore, more room to maneuver,” Griselli explained.
The executive mentioned that TIM’s 5G coverage is available in 322 Brazilian cities, but did not provide an estimate of when this technology could be accessible nationwide. As the company moves forward with its strategic investments, the future looks promising for TIM and its operations in Brazil.