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To: MrGreenJeans who wrote (2973)	9/29/2000 3:31:11 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Italy's TIM sticks to the basics Italian group wants bigger slice of France's Bouygues MGJ's comment: Another perspective on 3g from TIM By Gareth Vaughan, FTMarketWatch 3:58:00 PM BST Sep 29, 2000 LONDON (FTMW) -- In Italy even the Pope has a mobile phone. At least that's according to Mauro Sentinelli, the managing director of Telecom Italia Mobile, the biggest mobile phone operator in Europe's biggest cell-phone market. TIM has 20 million customers in Italy, where some 66 percent of the population uses a cell-phone, according to Sentinelli. However, he jokingly says that if you add all groups of Italian society, including priests and the Pope himself, it's more like 75 percent. TIM, conspicuous by its absence from third-generation mobile phone auctions in the U.K., and Germany, is following a different agenda to other major European mobile operators such as Vodafone [UK:VOD] [US:VOD] and France Telecom, [FR:013330] [US:FTE] which are focused on building fully controlled pan-European third-generation (3G) networks. "We do not believe that there's a great business case to pay for the licence, to run the network and invest in the network unless you have a previous 2G network, services and a customer base (in a country,)" Sentinelli said. Therefore TIM, which gained a Spanish 3G licence - where there wasn't an auction - with Amena, the mobile unit of Spain's Retevision, will bid for licences in France and Austria where it has affiliated companies. TIM wants bigger slice of Bouygues In France, TIM's 60 percent owner, Telecom Italia [US:TI], has a 10.8 percent stake in Bouygues Telecom [FR:012050], the nation's third-biggest mobile operator. Bouygues' chairman, Martin Bouygues, recently said he wasn't against Telecom Italia raising its stake in Bouygues Telecom, an idea that Sentinelli's keen on, if the price is right. "If the opportunity arose and the price was reasonable, absolutely yes (we would increase our stake in Bouygues)." Meanwhile, speculation's been mounting in recent times that Deutsche Telekom [DE:555750] [US:DT] is keen to strike an alliance with TIM as a way of entering the Italian market. But Sentinelli said there's nothing in the pipeline. "There's nothing going on so far, it's just speculation," he said. For the first half of 2000 TIM posted a 14.5 percent rise in EBITDA (earnings before interest, tax, depreciation and amortisation) versus the same period of 1999, to €1.86 billion. Italian 3G auction set to kick-off With the Italian government's 3G licence auction due to kick-off on October 2, analysts are predicting it could raise as much as $30 billion. With five licences being awarded that means a new entrant to the Italian market and another competitor for TIM, which currently controls over half the Italian market. Sentinelli says that it's crucial for incumbent operators like TIM to bid, but said he isn't too fazed by the prospect of more competition. "It's very difficult for any new entrant to get market share in a short time," he said. "(TIM has) economy of scale, economy of scope, innovative pricing and innovative services. A lot of things are going on (so) it's not going to be easy to steal customers from TIM." Still, the company's looking to less developed markets in Latin America as a way of achieving its main goal -- maintaining double digit EBITDA growth -- as Western European mobile penetration begins to reach saturation point. In February, TIM said it aimed to become the market leader in Brazil, which is the focus of its South American development. TIM estimates that Brazilian mobile users could rise fourfold to reach 35 million by 2005. "We believe that in the next five to 10 years Latin America will become the second Europe as far as mobile services are concerned," Sentinelli said. No European portal from TIM TIM won't be launching a pan-European mobile Web portal like the one KPN and NTT DoCoMo announced earlier on Friday. See related story. Sentinelli said this is partly because Europe is made of different countries with different customs and languages, but also because mobile operators should stick to what they do best. "We do not believe that the mobile operator will be very successful in producing the content itself, they're much better at organising other people's content," Sentinelli said. Shares in TIM were down 0.61 percent at €9.16 in Milan. Gareth Vaughan is a reporter in London for FTMarketWatch.