Telecom Italia reported revenues for the third quarter of EUR 7.52 billion, up 12.6 percent from a year earlier thanks to its expansion in South America. Growth was driven by Brazil and Argentina, which grew revenues 18.9 and 26.7 percent respectively, while the Italian operations saw the decline in revenues slow to 3.8 percent. EBITDA improved 16.6 percent to EUR 3.20 billion, and net profit grew 32.7 percent from a year earlier to EUR 807 million. In the first nine months of 2011, the company increased capex to EUR 3.19 billion from EUR 2.94 billion a year ago, while operating free cash flow surged to EUR 4.52 billion from EUR 1.07 billion, thanks to the consolidation of the Argentina activities. Net debt was down by EUR 1.2 billion from June, to a total 33.0 billion at the end of September. Telecom Italia maintained its full-year outlook for stable organic revenue and EBITDA, capex of around EUR 4.8 billion excluding the EUR 1.2 billion spent on LTE licences in Italy, and adjusted net debt of around EUR 30.7 billion at year-end.

In Italy, total revenues fell 4.0 percent to EUR 4.74 billion. Mobile service revenues fell 7.5 percent to EUR 1.73 billion, and fixed-line revenues were down 3.2 percent to EUR 3.35 billion. EBITDA improved 6.8 percent from a year ago to EUR 2.45 billion, thanks to cost reductions. The operator lost 28,000 retail broadband lines in the quarter, for a total 7.141 million at the end of September, and the number of fixed lines dropped by 135,000 to 14.827 million. IPTV subscribers fell by 32,000 in the three months to 296,000, and VoIP subscribers were down by 90,000 to 1.65 million. The operator did better in the mobile market, where TIM gained a net 419,000 new customers in Q3, to finish September with a total 31.679 million. Mobile voice traffic was up 4.1 percent from a year ago, and the number of handsets sold jumped 63.7 percent to 1.03 million. ARPU fell to EUR 17.5 from EUR 19.6 a year ago and EUR 18.0 in Q2, hurt by cuts to termination rates and price pressure.