Telecom Italia shares: Price analysis before buying or selling

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ISIN code: IT0003497168

Ticker: BIT: TIT

Index or market: MIL

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Elements to consider before selling or buying Telecom Italia shares

Analysis N°1

The telecommunications market is currently booming, especially in the broadband sector, which is showing interesting growth. The almost constant increase in demand could therefore benefit the Telecom Italia group, which is already well established in this segment and could therefore take advantage of it to expand its customer base and increase its turnover. Keeping an eye on this industry is a great idea to help you anticipate future revenues for this company.

Analysis N°2

Similarly, there has been a constant development of products and services in the telecommunications field for some time, with ever-increasing technological progress and the development of new products and services that are rapidly creating new needs. The Telecom Italia group is able to ride this wave of innovation by offering new products and services to Italian customers, which will once again enable it to gain market share.

Analysis N°3

It is known that Telecom Italia is currently implementing a strategy focused on growth both in Italy and in the rest of the world. Its efforts to promote international expansion could be rewarded with higher profits.

Analysis N°4

The Telecom Italia group faces extremely strong competition from many other groups and smaller companies. Its adaptation to the market in the face of these competitors is therefore a major challenge for its future.

Analysis N°5

There has also been a significant global economic slowdown in recent years, which is also having a marked effect on Italy. This should have an impact on the purchasing power of households and therefore on the sales capacity of this company.

Analysis N°6

Although Telecom Italia does its utmost to constantly offer its customers and prospects new products, it does not have the same innovative strength as some large international groups.

Analysis before buying or selling Telecom Italia shares

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General presentation of Telecom Italia

The Telecom Italia group is the leader in the telecommunications sector in Italy. Its turnover is generated by different types of activities, mainly traditional telecommunication services (mobile and fixed telephony, equipment, internet...), but also the manufacture and marketing of office equipment and terminals as well as the production and distribution of media content.

The vast majority of its business is in Italy, over 69%, but it also touches some European neighbouring countries.

Telecom Italia's share price is currently quoted on the Borsa Italiano market in Italy. It is also included in the calculation of the FTSE MIB stock market index.

Photo credits: ©claudiodivizia/123RF.COM

The major competitors of Telecom Italia

To be able to understand how Telecom Italia's share price will evolve, you also need to know about its main competitors. Here is a presentation of the main rivals of this group at the moment.

Fastweb

First of all, Fastweb, a subsidiary of Swisscom, is one of the main Internet service providers in Italy, which also offers fixed telephony and television services and has its own FTTH network in the major cities in addition to xDSL access. It also operates in 4G mobile telephony and as a virtual operator on the TIM network.

Enel

Another major competitor is the Enel group, which used to be Italy's national electricity company and is still the country's main producer of electrical energy. Today, it is also a group with diversified activities, including a subsidiary operating in the field of fibre optics.

Iliad

Of course, the French group Iliad is also a direct competitor of Telecom Italia. Iliad is active in France, but also in Italy, Morocco and Poland. It generates most of its revenues in the fixed Internet sector with its subsidiary Free and in mobile telephony with Free Mobile. It is now the 6th largest European telecommunications group with 42 million subscribers through its subsidiaries in France, Italy and Poland following the acquisition of the Polish operator Play in 2020.

The major partners of Telecom Italia

Now, after the adversaries that Telecom Italia has to face, let's discover some of the allies of this group. Indeed, in the past, the company has set up several strategic alliances, including the following recent examples:

Google

In 2020, Telecom Italia announced a partnership with Google Cloud. It has thus banked on this alliance to offer companies and public administrations various digital services in the field of data storage and processing. Telecom Italia intends to become a reference in Italy in cloud and edge computing, two markets that will become increasingly important with the implementation of 5G. The strengthening of cloud services completes Telecom Italia's diversification strategy. Apart from connectivity, the group wants to develop in related fields such as media and is betting heavily on technological services. It hopes to generate more than one billion in revenues and 0.4 billion in EBITDA by 2024. This diversification is indeed highly strategic in a context where competition is particularly important in traditional fixed and mobile Internet services.

KKR

Also in 2020, Telecom Italia Group announced that its board of directors approved a partnership with the KKR infrastructure fund. Under the terms of the agreement, KKR has invested nearly €1.8 billion to acquire a 37.5% stake in FiberCop, Telecom Italia's wholesale fibre and copper network business. Fastweb, the Italian subsidiary of the Swisscom group, holds a 4.5% stake in FiberCop.

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The factors in favour of a rise in the Telecom Italia share price:

In order to have the best chance of implementing an effective Telecom Italia share price strategy, whether you choose to buy these shares or trade on their online price with CFDs, you must of course start by understanding how this Italian company is likely to manage its economic development over the medium to long term. In this sense, it is essential to be aware of the various strengths and advantages of this stock and to compare them wisely. To help you in this task, we propose you here to reveal you these strengths and weaknesses in details. Let's start with the strengths of this company with the following points.

One of the company's main strengths is its ability to constantly develop new products and services. By always being on the lookout for new products to market, Telecom Italia is able to meet and even anticipate consumer needs, which gives it a certain edge over its competitors.
The Telecom Italia group also has a very strong presence in its sector of activity and throughout Italy, since it holds a large share of the market. Moreover, thanks to its long experience, it benefits from a good quality brand image. It maintains this image and its reputation through important marketing and advertising programs and through all communication channels.
From a purely financial point of view, we note that the Telecom Italia group presents interesting and reassuring results for investors and shareholders. This concerns in particular an operating margin that has been increasing for several years now and that continues to expand.
Of course, the group's ability to diversify its activities is also appreciated. In recent years, Telecom Italia has succeeded in establishing a strong position in the media sector, but also in the computer peripherals sector. In this way, it can protect itself against the risk of a single type of activity and secure income in the event of a recession in a particular sector.
Telecom Italia can also count on its large workforce to increase its profits and develop its presence in Italy and the rest of the world. Today, the company employs no less than 80,000 people in various countries.
Finally, it should be remembered that the Telecom Italia group is currently one of the leaders in the mobile telephony sector in Italy, with a total of more than 50 million customers to its credit. Customers that it manages to retain effectively.

The factors in favour of a drop in the Telecom Italia share price:

After having reviewed the numerous strong points of the Telecom Italia share, that is to say as many points which are in favour of a bullish progression of the share price, let us pass to the few weak points of this group which could come to slow down this rise or on the contrary lead to a bearish tendency in the more or less long term. Indeed, Telecom Italia does not have only advantages and also presents some weaknesses of which here are the main ones.

First of all, despite its strong presence on the Italian market, the Telecom Italia group has not yet managed to develop effectively in other countries. Its worldwide presence is still very limited, in particular because of strong competition from companies that have targeted their expansion well before. As a result, the group has only a very small share of the world's telecom market. This is not without consequences for its future because, in the event of a sectoral crisis in Italy, the company will not be able to rely on its international profits to maintain its profitability.
On the other hand, the group is also exposed to increasingly strong competition in the Italian market. Indeed, new competitors who are trying to undercut prices in the telecoms sector could gradually take market share from this major operator despite its historical offer. The same applies to certain large European groups which are also trying to enter this market by offering slightly cheaper services and products. Indeed, Telecom Italia's price level is currently slightly higher than that of its main competitors, even though the quality of service is superior, which could slow down some consumers looking for more attractive rates.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

What are the main subsidiaries owned by the Telecom Italia group?

In order to expand its presence on the national and international market and to meet the different needs of its customers, Telecom Italia has strategically diversified its activities over time. To this end, it has acquired several entities in order to create subsidiaries such as Telecom Italia Mobile or TIM, Telecom Italia Media, TIM Brasil, TIS France SAS and Olivetti.

Where are Telecom Italia shares listed and are they part of a stock market index?

Telecom Italia Group's share price is currently listed on the Mercato Telematico Azionario of the Bolsa Italiana, Italy's main financial market. It is also noted that this company is currently part of the composition of the national stock market index of reference in Italy, namely the FTSE MIB index. It is one of the most important market capitalisations in the Italian economy.

Where to find good Telecom Italia stock charts?

While you will of course have no trouble viewing the current Telecom Italia share price online as it is a particularly popular stock, it is better to follow its evolution on innovative charts such as those you will find on your trading platform, which allow you to perform advanced technical analysis thanks to the customization and display of various trend or volatility indicators.

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Analysis before buying or selling Telecom Italia shares