Rupert's BSkyB investing in Telecom Italia............................
techweb.com
Telecom Italia Boosts International Strategy
(09/28/98 8:49 a.m. ET)
By Ruth Sullivan, Contributor, TechWeb
Telecom Italia's board published Saturday its approval of a three-year investment plan, aimed at giving the group some long-awaited direction in international strategy and fulfilling ambitious goals of boosting revenue by about 7 percent a year over the next two years.
Following the announcement of the 40,000 billion Lira ($25 billion) investment, the Italian telecommunications company said it is confident it will reach the revenue goal and also a second objective of doubling its international business from its current 15 percent of group revenue by the end of 2001.
"Our planned investment in mobile phones, in data services and Internet, in digital TV with [media giant, Rupert] Murdoch, and our strong first half results are all positive signs that we will achieve our goals," said a Telecom Italia spokesman Monday.
First half-year results, approved by the board, showed the group's consolidated net profit rose 75 percent to 3.2 trillion Lira ($1.93 billion) from 1.83 trillion Lira ($1.11 billion) a year earlier.
But some analysts still have doubts over the group's ability to deliver a successful performance after months of internal management wrangling, confused signals from group chairman Gian Maria Rossignolo, and too many unstable deals.
"The basics of the plan are fine and so is the investment in data services and Internet," said Chris Lewis of analysts the Yankee Group Europe, in Watford, England. "But there is still lack of direction at the top and a substantial partner has yet to materialize," he said.
Other analysts in the sector are more upbeat about developments and say it is at least a good start. "We should be looking at potential return for investors, but now the challenge is to execute the plan," said telecom analyst Jonathan Adams from J.P. Morgan in London.
On Monday, Telecom Italia's spokesman said the agreement with the United Kingdom's Cable & Wireless to set up a global network company "is at extremely advanced stages." If the deal is confirmed, the joint operating network would become the second biggest in the world after AT&T.
Sources close to the group also confirmed the Italian company has just signed a preliminary agreement with the French conglomerate Bouygues to purchase a 40 percent stake in its 9 Telecom subsidiary. Added to Telecom Italia's existing 49 percent stake in Bouygues' holding company, this would give increase Telecom Italia's stake to 89 percent.
During the weekend, the group's board issued an Oct. 5 deadline to state broadcaster RAI to reach a decision with the telecom group's multimedia subsidiary Stream and Rupert Murdoch's TV company BSkyB to set up a joint holding company to broadcast Italian football on a digital pay-television platform.
|
