Telecom Italia 1Q08 results

Its 1Q08 net profit fell 35% to €501m on revenues of €7.3bn, down 2.5%. TI was hit by stiffening competition in Italy's broadband market and regulatory changes in fixed line. Its performance in emerging markets was also lowered by wider loss in its TIM Brazil unit, showing growing challenges in emerging markets. More important perhaps is the lack of strategy and of a vision of the future. This has a cost: the share lost 37% in the quarter. If there are no negative surprise in these results, they were short of average estimates. TI has received three bids for its French unit (Alice) and said it will not bid for Tiscali assets. The current main target is reducing debt (today at €35.4bn), so no aggressive moves is scheduled short-term due to financial constraints.