Telecom Italia has cut the 2021 earnings forecast for its domestic business.
The cut is due to lower-than-expected fixed line revenue from its partnership with DAZN to screen Italian soccer.
TIM said it expected a “low teens decrease” in 2021 organic earnings before interest, tax, depreciation and amortisation after leases (EBITDA-AL) for the domestic business.
In October, it forecast a “high single-digit decrease” for the business.
Earlier this year, TIM entered into a 1 billion euros deal with sport streaming service DAZN to try to boost its broadband and pay-TV services. read more
TIM is now looking to cut the cost of the deal with DAZN after the accord to distribute Italy’s top flight soccer league matches generated less revenue than expected.
TIM, Europe’s sixth largest telecoms group, said it expected group EBITDA-AL for 2021 to be higher than 5.4 billion euros thanks to growth at its Brazil business unit, which was confirmed at a “mid single-digit” rate.
EBITDA-AL was 6.3 billion euros in 2020, according to TIM’s annual report, and the group had previously flagged a “mid-single digit” drop for this year.
After a 435 million euros payment for licences, the company’s adjusted consolidated net financial debt is expected to be around 17.6 billion euros.
TIM’s board is due to meet on Friday to discuss how to respond to the 33 billion euro takeover proposal from U.S. fund KKR.
