Telecom Italia SpA
MIL:TIT
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Telecom Italia SpA
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Ladies and gentlemen, good afternoon, and welcome to Telecom Italia's Second Quarter 2020 Results Conference Call. Ms. Carola Bardelli, Head of Investor Relations, will introduce the event.
Ladies and gentlemen, good afternoon. This is Carola Bardelli, Head of Investor Relations. A very warm welcome to our second quarter 2020 results presentation. I'm here with our CEO Luigi Gubitosi; and our CFO, Giovanni Ronca. Luigi will provide an update on the plan execution and on the main strategic initiatives, and Giovanni will present our second quarter results. A Q&A session will follow.
Pointing out to you to our safe harbor disclaimer on Page 1, let me remind you that our comments are based on IFRS 16 standards, and we are also showing an after lease view on which we are basing our guidance, in line with most of our peers. So Luigi, the floor is yours.
Thank you, Carola. Good afternoon, everyone, and good morning for those of you connected from the U.S. I'm glad to report today that execution of plans and strategic initiatives are on track. First of all, key 2 KPIs are all pointing in the right direction, and they're showing that we are doing the right things to turn around the business. We took some short gain for a long-term gain, as they say. Secondly, we have set the path for a steep change in the Italian telecom market, an extremely important step for the good future of the country, for TIM and for all stakeholders.
On our Capital Market Day in March, we announced our fiber network plans. During the roadshow, we promised delivery by the summer of the deal. Today -- and today, I'm happy to confirm that we have delivered on what we said. We have received a binding offer from KKR, which is in line with what we had anticipated, actually better. It was designed to be also the first steps toward the creation of a single network. So much that yesterday, we gladly welcome government's formal letter on its commitment to make the single network happen and to speed up such processes.
The government is going to work on it in the coming days. The Board of Directors of TIM mandated me to act and KKR extended its offer accordingly. I am very sorry for those colleagues that will have to work hard in August. Maybe they will not see this as the greatest news. But for the company, customers, investors and the country, this indeed could be great news.
So let me start with a quick update on the operations from Slide 3. As I said, operation are showing positive sign turnaround, both in Fixed and Mobile. Customer satisfaction and Net Promoter Score have improved for our retail and wholesale customers in the quarter with intense usage and more complex relationship with our customer due to the lockdown. As a matter of fact, I'm particularly pleased that we're #1 customer -- player among the infrastructure operators in terms of customer satisfaction index. It wasn't so in the past.
This is an indirect measure of the effect in the change of culture and organization that is ongoing. And this is one basic point. Some of you might wonder why we put culture, engagement, organization at the very beginning of our presentation. Because it's extremely important to make sure that all the plans do happen. And we want to transform the culture of TIM in a culture of service -- and customers stay with you if they're happy, and they're increasingly happy. So this will have -- will continue to have a beneficial effect in the future. We launched an employee shareholding plan, once again, to align interests, to increase loyalty and to motivate more in the stock level. It's a friendly procedure and convenient condition that will enlarge further the number of employees that are already shareholders. So they will be more engaged and interested in the company results and activities.
We continue to transform TIM into a leaner company. In H1, there were 2,800 exit, basically for early retirement. We reached 3,400 exit by the end of this year. Again, these are all voluntary preretirement exits.
On the domestic front, we had a quarter, very good KPIs, both in Fixed and Mobile. In Mobile, we reported positive net adds in Mobile calling human lines, the key KPI for mobile service revenue turnaround. In fact, for the first time since a while, actually since Iliad entered the market and the market become a bit more chaotic.
In Fixed, we're almost 0 on the line losses in consumer, and we added 0.5 million new fiber lines, including retail, wholesale, with retail almost doubling, benefiting from improved fiber coverage. We've been given authorization to switch to -- on fiber in 7,000s cabinet in rural areas, providing access to ultra-broadband to additional 1.2 million customers. Today, we already passed the market of 10,800 cabinets. And we're targeting to reach 12,500 corresponding to 2,400 new cities by the end of the summer. By the year-end, we'll have increased coverage to almost 6% of population. And actually, a number of cabinets will increase to over 15,000.
We pushed towards more digital sales channels with increased automated payments with web sales. And this has benefits on bad debt and commercial costs. In Brazil, unlike Italy, the COVID emergency is still ongoing in some regions. However, the team has been working out with strong cost control, and we were able to grow EBITDA with a remarkable result on operating free cash flow. The group overall continues to generate cash to reduce debt and actually, Q2 debt reduction is the highest we were able to achieve since I joined. Importantly, the organic cash generation of quarter 1 was enough to cover the dividends. We are paying the savings shares in ordinary for the first time since 2013. Given the results achieved on guidance, we're able to confirm equity free cash flow guidance despite embedding the estimated COVID-19 impact, approximate 3 points. And we are able to improve deleverage targeting EUR 2 billion, thanks to the INWIT transaction, and KKR is not reflected yet in our numbers.
As I move to the next slide, you see one of the pillars of our strategy are probably one of the key factors for the adoption of fiber in the coming years. When speaking of operation, why do I start with content? Because this is a game changer in adoption of fiber in Italy. You will see later that with FTTx, we're offering over 100 megabit speed to about 50% of [ pops ] and over 50 megabit per second to over 85%. However, we still have a good half of our customer base to migrate to fiber. Today, I can say that the TIMVISION platform can be finally a game changer for fiber adoption. We have a new TIMVISION box, extremely user-friendly. We have all Sky's content at lower prices. And on top, we have Disney exclusive and Amazon Prime and obviously, Netflix.
In conclusion, we have all the ingredients to compete with unbeatable packages in this space. We'll also extend TIM Unica to the business segment to further convergence, and we have enriched our working portfolio for small and medium business.
On Slide 5, we're trying anticipate some of your questions. COVID impact, where do we stand? Italy is now entering in a phase that we can define as post lockdown with businesses reopening, the number of infected people is drastically reduced, with many regions with 0 infections. As we told you in Q1, EUR 2.7 billion have been allocated to the telco sector in the form of financing for school connectivity, fiber rollout in gray areas and vouchers to stimulate UBB adoption. The good news today is that vouchers for low-income families have already been approved by EU. The second good news is that the Italian economy will benefit from EUR 209 billion recovery fund. By the way, we expect that a part of it will be used to further accelerate the digitalization of the country. This means more cloud, more connectivity and more digital services. But even what has already been decided, for example, the school connectivity, we understand it could be increased.
Having said that, in Q2 in the short term, the first consequence is the lower tourism to and from Italy, which reduces both retail and wholesale roaming revenues. In Fixed, gross adds were impacted by the lockdown, hence, the overall impact for TIM in Q2 was around 1.7 percentage points on revenues and 3.7 percentage points on EBITDA. In other words, organic EBITDA would have been 3.7% higher in the absence of COVID. And of course, our life would have been much easier. On the other side, if one can speak a positive implication of covered for telcos, assuming one can use the word positive when COVID is also the same statement -- for telcos, the long-term implication is indeed positive. We've already seen for the first time since years an inversion in the Fixed to Mobile substitution trend.
So if we combine the new push coming from this emergency with the actions we have taken to fix the Fixed, we are confident that Fixed service revenues could show a better trend in H2 compared to H1.
Let's move on our strategic initiatives on Page 6. On the towers, we have completed our process with a monetization about -- above expectation, EUR 2.2 billion versus EUR 1.4 billion when we first announced exactly 1 year ago. And of course, we are maintaining joint control of the company. Our agreement with Google is already proving effective to gain market share and new opportunities in the cloud space. We recently signed agreements to provide ICT and cloud services to major enterprises, such as Intesa Sanpaolo. It is a great reference, and it's helping us a lot within the banking sectors. We have a number of other customers that we added to the pipeline as we speak. We are on track to execute the carve-out our data centers in Q4 this year, I believe, at the end of October or so. We have submitted the binding offer finally for the joint acquisition of our mobile assets with Claro and Telefónica. There is not much more that we can disclose at this stage as this is breaking news in a sense that we're discussing with Oi as we speak. And therefore, I will not be able to comment specifically other than say that I think it's a deal that I think makes a lot of sense. It's a good option for everybody.
Now let me speak about the offer that we received from KKR. And I'm on Page 7. We have now received, as I said, a binding offer from KKR to co-invest with them and Fastweb to create FiberCop, the carve-out of TIM's passive secondary network. They will become the largest passive infrastructure wholesaler in Italy. Our Board has strongly appreciated the offering, all these detail and conditions. But reconvenes itself on August 31 to formally vote on it, further to letter sent by our government to design the deal in a wider framework, i.e., the creation of a single network for the country, a request that TIM, KKR and Fastweb welcome, in fact, with enthusiasm because, of course, it was already part of our plans and goals.
So in the meantime, let me tell you more about FiberCop. As I said before, FiberCop. is designed to be the largest wholesaler in Italy, supplier of TIM, Fastweb, and all telco operators, that would have ownership of the passive part of the secondary network covering today 85% of Italian population with FTTx that will be accreted to FTTH to cover 56% of Italy at some point between 2025 and 2026, which corresponds to 76% coverage of the black and gray areas.
Just to remind, when we stand at the end of the year, we will have, obviously, the gray areas covered at over 97.5% with a FTTH -- FTTC, sorry, and we will have built over 50% of the white areas. In fact, talking about white areas, we have informed the government that we will be prepared to act and to close the digital gap in the white areas by 2021. FiberCop allowed TIM to complete our fiber rollout, and at the same time, to further reduce our net debt to EUR 1.8 billion cash proceeds from the sale of a 37.5% stake to KKR. TIM will be the sole technical supplier to the network for rollout and maintenance.
Our partners in the project are also Fastweb, entered into contribution of the 20% stake in Flash Fiber that will give them a 4.5%, and KKR. KKR offer is based on enterprise value of EUR 7.7 billion start. What do we mean when I say a start? KKR itself are very confident in the strong rating path for the asset as the proportion of EBITDA coming from fiber will grow over time, and the weight of copper will diminish. Fiber, of course, pay out higher multiples than copper in addition to improved economics. Maintaining fiber is much cheaper than maintaining copper, hence both OpEx and CapEx will fall over time. And last but not least, it was designed to be a first step towards a single network. And looks like this part works better than we thought.
Slide 8 summarizes the business rationale and the key benefits for TIM. It's not only about rolling out our fiber but about pushing adoption of the fiber in the country. It is about equity financing, the FTTH rollout, which we'll target 56% FTTH coverage already in 2025, 2026. Importantly, FiberCop already sits on 85% FTTH cap coverage, so the upgrade can be done within our CapEx yearly budget of approximately EUR 2.9 billion during the planned horizon and a similar level in coming years. So no deviation versus what you already know, other than the possibility to bring CapEx sales at around just about 10% after rollout period.
With Fastweb, we are continuing our positive experience in Flash Fiber. We compete fiercely on the market, and we share costs. It's nothing unusual. And in fact, we would welcome other operators to join this co-investment plan going forward. The platform will be open to all our competitors, and we are ready, as I said, to welcome them into the company. We will bring fiber in the gray areas. So to close the digital divide in a large part of that Italy and strengthen our competitive position, both in retail and wholesale. This makes any potential agreement with Open Fiber easier.
As I said, FiberCop will unlock TIM hidden value [ into former ]. It crystallize the value of a part of our network at multiples well above the group's, paves the way to further rerating once the switch to fiber is completed. Once roll out will be completed, the cash generation profile of FiberCop will be very interesting and will further contribute to material deleverage of the group.
On Slide 9, you can see the transaction is designed to be executed in 2 stages. First of all, creating FiberCop as a separated entity that will have the ownership of TIM secondary copper and fiber networks, including TIM 80% stake in Flash Fiber. In the second step, Fastweb will be granted with 4.5% of FiberCop shares in exchange for their 20% stake in Flash Fiber. In KKR, we buy 37.5% share of FiberCop for EUR 1.8 billion, that will be cash by TIM.
The perimeter on FiberCop, and I'm Slide 10, includes the passive secondary network from the cabinet to the buildings, both copper and fiber. The cabinet itself can only keeping in service within TIM retail customer premises will remain within domain. FiberCop will provide passive access services to TIM and other OLOs with a very lean structure. It will be a lean company with less than 100 employees. Hence, FiberCop will buy all the main services from TIM -- network construction, maintenance, assurance as well as general services, from corporate affairs to treasury and procurement. So this project is ready to shift to an execution phase. It has a sound business rationale, will benefit the country and all our stakeholders with it and is indeed value accretive.
We're putting on all to see if we can make it even better to achieving an agreement for a combination with Open Fiber and the creation of a single networks. Things are happening fast now. So we'll be updating you shortly.
Now let me hand you to Giovanni who will illustrate the financial results.
Thank you, Luigi. Good afternoon, everyone. Let's start from the highlights of this quarter on Page 19 (sic) [ 12 ]. In this quarter, debt reduction was substantial, thanks to organic and inorganic actions, the biggest quarter-on-quarter fall since Luigi started. Such result was achieved despite the drags that we have experienced from COVID, that have pushed down service revenues by a couple of points in Italy, mainly for roaming and a slightly higher impact in Brazil. Through cost reduction and accelerating efficiencies, both in Italy and Brazil, EBITDA decrease was limited to 6.4% from minus 8.5% of Q1. Robust cash generation continues, and our equity free cash flow for the first half reached almost EUR 800 million, excluding the impact of one-offs and exchange rate fluctuations. Debt after lease is down almost -- more than EUR 600 million in the quarter and almost EUR 800 million in the first half.
Moving to Page 13. You see that group net debt after lease is down EUR 3.8 billion in 20 months, thanks to the EUR 1.9 billion organic reduction achieved in the last 18 months and more than EUR 2 billion coming from INWIT. Additional EUR 1.8 billion are likely to come from KKR. This is not included in the chart calculations.
Slide 14. As Luigi said, Q2 was a good quarter for Mobile KPIs, and the market showed a further sign of improved rationality with mobile number portability down 9% year-on-year and TIM almost flat quarter-on-quarter on MNP. We even reached positive "calling" net adds, 87,000 lines, taking us back to growth for the first time since 2018. Stabilizing the client base is key for us as it is still the main reason for mobile service revenue decline, 5 points in Q1. Importantly, our customer satisfaction index improved. We are now in front of the top 3 in client perception, and this is the reason why we have better net adds and churn versus previous quarter.
In Slide 15, you see the ARPU is no longer a problem in Mobile. ARPU is flattish year-on-year and underlying ARPU is actually growing 2% year-on-year, net of the effect of the content service providers cleanup. As I said, the reason why the underlying service revenues are still falling 5 points year-on-year is the customer base. That is why we are pleased to see net adds improving. Then in Q2, mobile service revenues were impacted by a number of one-offs. COVID with an impact of 2.2 points; CSP, 2.5; and the renegotiation of Consip contract at a lower price, accounting for less than 1 point. The good news is that none of these 3 drags will be back in 2021. So in total, there is a 6-point drag affect in Q2 and Q3 that will disappear by 2021. Lastly, mobile handsets sales declined during the lockdown.
Page 16. Q2 was a good quarter for the Fixed KPIs as well. And we increased the overall number of accesses thanks to record low line losses in retail and positive net adds in wholesale. Fiber lines have increased by more than 0.5 million with retail almost doubling versus Q1. And the rest wholesale, where VULA activations have exceeded the copper disconnections hugely. These results come from the ongoing "fix the fixed" strategy, higher market discipline and the opening in the rural areas of 7,000 new cabinets, reaching with fiber, 1.2 million of new customers. In these areas, we have seen both migration from copper to fiber and significant increase of new activations. Moreover, we will further increase the number of cabinets by around 10% by the end of the year.
Moving to Page 17. The year-on-year trend on fixed service revenues is improving versus Q1, and it is due to the better wholesale performance, which itself comes from the positive net adds and the better mix between copper and fiber. Quality has improved both for retail and wholesale customers. International wholesale revenue, [ revenue cleaning ], is fading away. And the year-on-year trend improving from Q1 to almost 5 percentage points.
Retail is broadly in line with Q1, but we anticipate H2 better than Q1, I would say, mainly for 2 reasons. We are seeing better trends on the customer base, which still explain 80% of Q2 year-on-year fall and importantly, expected to halve by the end of the year. The second reason is related to ARPU that will be supported by our commercial offering, facilitating upselling and cross-selling with a "more for more" approach. And by the end of a trial period of promotions launched in the recent months.
Page 18. OpEx reduction in the quarter is impressive, 13% year-on-year and even higher if we look at addressable costs, which were down almost 14%, totally under control. Interconnection was down 5%, mainly mirroring Sparkle strength in revenues. Equipment costs were down 31% as a consequence of the lower sales driven by the lockdown. Cost of good increase was driven by higher ICT revenues in the enterprise segment. Commercial costs are significantly down, minus 21% year-on-year, thanks to the lower content cost for the CSP cleanup as well as the improved efficiencies in wholesale processes and caring. Industrial costs are down 8% and G&A, 4%, thanks to the optimization in different areas, mainly real estate related. On labor, last but not least, the 11% reduction primarily reflects the impact of the exit of 2019, more or less 2,700 FTEs.
Let's move to Slide '19. CapEx are down 19% year-on-year for investment postponements due to the lockdown that will be reactivated in the coming quarters as well as for the improved efficiency in Italy and Brazil. Working capital outflow improved at the group level despite drags from both the one-offs and noncomparable items in the domestic business unit that were offset by Brazil positive impact of the exchange rate and the delay to August due to COVID of the payment of Fistel tax as well in Brazil.
Let's talk about the leverage on Slide 20. Net debt was reduced in 6 months by almost EUR 2 billion or on after lease basis by almost EUR 800 million, reaching EUR 21.1 billion, down EUR 1.7 billion versus June of last year. We are just seeing the dynamics of this reduction related to business performance. I would like also to highlight that the EUR 52 million improvement in Q2 in financial charges due to lower cost of debt and lower average outstanding.
Liquidity, Page 21. Liquidity position is extremely sound. And the cost of debt is down by more than 300 basis points.
Last slide on Brazil. TIM Brasil has already reported so I will quickly scan through the highlights of the results. Service revenue are down 3.4% year-on-year, mainly for the COVID headwinds that have hit prepaid more than postpaid. The strong action on cost has helped reaching an EBITDA growth also this quarter, plus 1%. Remarkably, the Mobile ARPU has been growing as well, increasing by 1% year-on-year. TIM Live [ customer rate ] is growing at 30%, reaching 600,000 clients -- the 600,000 client milestone. The company keeps being very active also on network deployment and innovation, showing early positive sign after the closing of the partnership with C6 Bank and the launch of the new commercial offering.
Now let me hand it back to Luigi for his closing remarks.
Thanks, Giovanni, on Page 23 on guidance. Our guidance, we are doing what the consensus has already done, basically: i.e., we embodied our best estimate of the COVID-19 effect, which we expect to affecting only 2020 revenues, EBITDA and CapEx. Cumulated equity free cash flow guidance for 2022 remains unchanged as well as targets for 2021 and 2022, and we're increasingly comfortable with them. And we're significantly improving our net debt target by EUR 2 billion to achieve less than EUR 18 billion net debt by 2021 versus EUR 20 billion our previous guidance. Please notice that reflects only INWIT and we're not considering KKR in this guidance yet. So actually, if you go back to our first plan on February 22, '19, the number of net debt has declined every time, and we -- we are not finished yet.
And as we are not finished yet, we move to the next page for closing remarks. In conclusion, what can I say, our operation time plan and our extraordinary action at full speed despite COVID. And in fact, in 20 months, we were able to achieve a debt cut by EUR 3.8 billion. In short, we expect H2 to be better than H1 and 2021 to be much better than 2020. The company is gearing up to this extent. You obviously don't see it, but the machine is improving constantly in terms of culture, processes, people, effectiveness. The creation of FiberCop opens the way for new opportunities for TIM, its shareholders, and the country. We're glad to speed up the process to create a single network and be able to confirm a cumulated equity free cash flow target and to raise our debt guidance by EUR 2 billion.
I guess, now it's time for Q&A. And we're ready to be at your disposal for anything you may want to ask.
Thank you. Operator, we are ready for the Q&A session. Thank you. Operator, can you hear us?
Mr. Keval Khiroya from Deutsche Bank.
I've got some questions on the potential single network deal, please. So first, I know there's obviously a lot of potential structures, but could you give us a view on whether you would seek to consolidate the asset? I think you've been clear that you would like to control it. And also as part of that, could you give us any detail on your thoughts around what concessions you'd be willing to offer to allow you to be in a position of control?
Okay. Thank you for your question. On the third question, you are basically saying, do we intend to consolidate, it is our objective to maintain 51% plus if I understood correctly, to be your first question. The answer is yes.
The second answer, it's more difficult to give because I think the government has invited to discuss with all parties involved. So the first position, I said before, it's something that I already made public. So I'm not saying anything no one knows. But to tell you what concessions specifically, I think, will be most inappropriate. I think we'll have to talk with the government officials and the other parties that will be part of this discussion.
I think that our objective is to be -- to create a single network, which gives to everybody the assurance that basically it's a company open to all operators that would want to join, both as a stakeholder, but anyway, as a customer. So it's going to be total parity of access, of treatment. There's not going to be any doubt that, that would not occur. And in this respect, we -- I'm sure that we could discuss significant improvement to guidance, say, of an overreach or so, but already creating a separate company, it's a significant improvement, for example, to the present situation, where actually, we do serve the majority of the operators. I mean, all the operators, but with majority of clients to the operators. And we get very good customer satisfaction from our counterparts. Our wholesale business, as you know, is doing well and is well appreciated. It will be further separated from the rest of our business. But as I said, the specifics, I think it's something that we should discuss separate and discuss afterwards. We do -- unfortunately, it would be inappropriate to go the other way around.
Next question comes from Mr. Domenico Ghilotti from Equita.
So the first question is on the 5G launch. So could you update us on your commitment and the investment that you see for the 5G? When you are really ready to start for commercial launch of the 5G?
The second question is still on the single network. So clearly, 3 weeks for reaching -- to negotiate a deal is very, very short time. So I'm trying to understand what is the reasonable outcome after the 3 weeks. So should we expect to see, say, already something well-established as a proposal by the end of August? And in particular, on the single network, I'm trying to understand if there is a chance that at the end there is just a co-investment agreement? Or do you think that the single network is something more than that? So it's really a merger of the companies?
Okay. Your first question was on 5G. On 5G, we are progressing. I think, actually, it's the area in which Italy got the best marks on the [ EC ] report. I think we were deemed to be third in this respect -- we've actually started the commercial launch. But as for all new services, you need to have some in place in order to feel it. When I was at Fiat, before you start seeing a new car, we are told you need to sell at least 10,000 to 15,000 or so. And the same is true for 5G. In fact, 5G will become very noticeable in Milan at year-end because over 90% of the population -- we like to never to say 100% because, of course, there's always that single spot that is difficult to cover. But over 90% of the population is going to be covered by 5G. And I think that's going to be the first large city in Europe this year to be so covered -- so fully covered. And then we're moving both on the other large Italian city, think of a Florence, Turin, Rome and also industrial district.
I think 5G is going to be very important for the industrial district, where FWA -- in some of the industrial districts. In some other industrial districts, we will go with the traditional fiber, obviously. But there are situations in which you may want to have FWA. Actually, FWA is a very exciting technology. We are happy that we announced we were entering, you might recall some time ago, as part our Fixed plans, and we're getting increasingly satisfaction on that.
So on 5G, we're progressing. That will mean also that people will have to start having more 5G devices. And obviously, every Christmas season is opportunity, then you will have some important telephone producer -- devices producers that will launch their 5G model. And as you know, some people are -- tend to be very loyal to their own brand. And so when everybody will have the 5G model is going to be more common. But I will say that a year from now, you will not ask the same question.
Then, what was your second question? Okay. Of course, look, to give you a sense, it took us 8 months to transform KKR from an idea into something that you could sign. So I don't think anybody can reasonably expect that in 3 weeks, you could have a signed deal on a network. I mean there is no limit to optimism, but I think one has to be realistic.
However, if you want, you can do a lot in 3 weeks in the sense that you can finally -- and now this is -- bear in mind that as compared to the past, where there was an effort by effectively 3 companies that were talking to each other, CDP and us and Enel, this is the first time that the government intervenes. So how could I say -- convinced that there is -- in fact, the government has put a single network, investment in the 5G, digitalization. I mean digital is a big part of the plan of our government as -- actually as an operator and also as a Vice Chairman of Confindustria on the digital side, I'm very encouraged to see that the government is giving -- is paying so much attention to the digital, which was something that was perceived to be, yes, important, but nobody really paid too much attention. They were more interesting and more urgent things to do.
So now the government has decided that they want to give it a try, and eventually, the government, it's the ultimate controlling shareholders of 2 of the 3 parties. The third party, it's already convinced that is a good idea, and I mean ourselves. So we will be happy to see it. And obviously, we cannot have a guarantee that there is going to be a deal because it will have to be a deal that this obviously makes sense for us. That is satisfying, that uses certain requirements. But I think what you can try to do is definitely a MoU which sets principles and timing of what should happen later. I think what they also say is that we have a plan -- what I mean, FiberCop. Let's make sure that this FiberCop could be integrated in a number of steps, that could bring to a single network. And this is what we're also trying to do between now and August 31.
So basically, this is what's already in our plans. I think we had announced long before that we think it's a great idea assuming the terms and condition can be matched. Because there is also sometimes when you have great ideas, but then you don't find a point of agreement.
So I think we're not talking about co-investment here. We're talking about a single company, in which companies can enter and invest. For example, it would be a great idea if say a Vodafone or a Wind or so would pragmatically approach the matter and look at this benefit. And one of the most demanding companies to deal with, and I say that with a lot of respect, is Fastweb. They're not easy to satisfy or to please. They're very, I would say, protective of their interest, but they entered. So they thought it was a great idea. I think if one abandons, how could I say, an ideological approach and look pragmatically at what's best, you'll see that's going to be -- there should be a lot of interest because it would be best for everybody and for our country.
So I made it probably too long an answer to your question. So in short, I think we always say that a single network is the best thing. Co-investment is a distant second option. But basically, we think that -- I always say that when there is a will, there is a way. So on our part, there is a willingness to put -- have a very fair, honest and diligent effort to make it up. And then we'll see what are the proposals on the table, and we'll see what is best for our stakeholders. And of course, our first interest is to preserve the company values.
[Operator Instructions]
Next question comes from Mr. Georgios Ierodiaconou from Citi.
[Technical Difficulty]
We lost you.
Mr. Ierodiaconou, can you hear me?
Maybe let's move to the next question while Georgios reconnects, please.
Okay. Okay. Next question comes from Mr. Sam McHugh from Exane.
Just a couple of quick ones again on single network and KKR deal. I guess, Luigi, I think you just said the single network was the best thing. Why is it the best thing? Italy, I think has seen more fiber deployment in the last 12 months than pretty much any European country. And it does look like infrastructure competition has been pretty good for consumers at least. So I was just wondering what you would say to that. And then secondly, the idea of the single network does look a lot like a bailout of Telecom Italia, which I can partially understand given that CDP did create Open Fiber in the first place. But are you worried about European aid rules coming into force in a single network scenario?
Okay. That was not entirely clear. I understand at some point that you're saying that maybe -- why it's best, in my opinion, to have a single network? And your second question was, this looks like a bailout for Telecom Italia? Have I understood correctly?
Yes. So we've seen lots of infrastructure build in the last 12 months. So it looks like infrastructure competition has been good for Italy. And I wonder why you think it's not been good. And then the second one was about state aid rules coming into play, European state aid rule, were there to be some agreement between Open Fiber…
Okay. I think I understood the question, my apologies. Okay. First one on why is it better. First of all, if you were to try to build a new motorway connecting Rome and Milan, they probably won't let you do it, nor a second airport next to Fiumicino. Probably, they would say, enlarge the existing one, improve the existing one. I'm not aware of any successful wholesale-only activity anywhere in Europe, which is not a local one original. And frankly, I don't like to necessarily, how I could say, sounds unrespectful of my competitors, but the white areas are late by 3 years after 3 years. And the reason why we're not reaching 2020, [ Lisbon ] 2020 is because somebody did not respect engagements, which never happened to Telecom Italia in its long history.
So I think if we -- so what happened was that Open Fiber is basically doubling the infrastructure. And in theory, I think in this business, being regulated, we can't -- with limited resources that have our society, building twice the same thing in certain areas, and building 0 times in areas that are without that would be need, it's basically increasing a digital divide. A Digital divide that increases today becomes a social divide. We have a part of the population that, during COVID, were not able to use Internet. And so rather than having 2 sets of fibers in Via Montenapoleone in Milan, I would have 1 in Montenapoleone and 1 in somewhere else where there isn't. Then obviously, all of that would have to be regulated. Of course, you would not expect anyone to set freely. But I don't think we ever set freely any price, anywhere, any SLAs and so on and so forth.
I was wondering whether to answer you on the question -- whether it sounds like a bailout. Because I mean, of course, you have to defend your opinion and your research, but you've probably seen the numbers on debt reduction. I think they are the answer to your question. I think if anyone is going to get a bailout, it's not going to be us -- I mean -- and again, in making this question, you forced me to speak about our competitors. I don't know how much EBITDA they do have EUR 3.5 billion of investments -- traces. We are a sound business in a very competitive sector, which as you -- a leading analyst, you will know that Italy is the most competitive market. And we're improving our position in a competitive market. In fact, if you look at our competitor results, you won't find much better in Italy, I mean. Of course, if you compare ourselves to somebody which has an ARPU that is double, it's probably a bit easier. So the short answer is no. It's not a bailout. I think I take it as a friendly joke and appreciate it.
Next question comes from Mr. James Ratzer from New Street Research.
I had 2 questions, please. The first one was I was wondering if you could give us, please, an update on the voucher scheme that's being put forward by the government? I mean when do you think we will start to see that come into practice? And can you help us to quantify what you think the benefits might be to Telecom Italia from that scheme?
And then the second question I had, please, was just going back to the KKR offer, the binding offer that they've made. Can you confirm, is this dependent on a deal being done with Enel Open Fiber? I'm just trying to think about what happens if you can't reach an agreement with Enel Open Fiber on a single network. Does the KKR deal still go ahead? And does that go ahead at the end of August if you haven't reached an agreement with Enel Open Fiber? I'd just like to get an understanding of what might happen after the end of August if you haven't, for some reason, been able to reach agreement with Enel?
The second answer is the easiest, because it's -- yes, absolutely. So this really…
Yes, it is fine -- it is dependent on…
No, no, no. No, I thought the question was, is it going to happen independently? And the answer is yes, it will happen anyway, independently. So let's assume there was nothing. We have just employed August in a different form other than being lazy on a beach. Yes, indeed, we would close KKR anyway.
The second answer is on vouchers, okay? We got news. I think it is in these very days that the first tranche of vouchers are going to be released in September. These are going to be dedicated to population of less than -- with an income, certified income of less than EUR 20,000. These people will be entitled to have EUR 200 vouchers for connectivity and a EUR 300 voucher for the purchase of a tablet, laptop, anyway, an instrument device they can use to be connected. So these have been approved by the European Union. And I think shortly, we'll be -- we will know all the details. But I expect -- in fact, it's not that I expect, I read that it's going to start at the beginning of September. The second phase will be then for families, which do not have this low-income threshold, that, I think, is still -- they have launched a consultation basically to get opinions from the various operators, will be sent to Brussels, get a stamp of approval, hopefully. And I think it's year-end-ish beginning of next year depending on the timing of completing the -- all the necessary paperwork and getting the approval from Brussels, which I think on these matters will be pretty expeditious.
Then on the other part of the government, I think, as I said, we said before, there's going to be EUR 400 million for connectivity to the school. This is being studied as we speak. I heard that, that could be actually increased as an amount, and then there's going to be another EUR 1.1 billion for the gray areas. Bear in mind that this is the amount that the Italian government have dedicated to the sector before the EUR 209 billion of the recovery fund -- were attributed to Italy. So what we would expect is that there are going to be other parts of the of these grants, they will be dedicated to cloud -- in general to the digital compartment. Exactly how, obviously, we don't know. But I think there's going to be significant funding coming to the sector at large, which is why I'm significantly more confident now on our objectives on the next couple of years. Did I answer your question?
Next question comes from Mr. Jeremy Dellis from Jefferies.
The first question has to do with the improvement in fixed service revenue trends that you're [ riding before ] in the second half. And I wondered what potential you think in the current political environment with the difficult economic circumstances of the population, is there really for Telecom Italia to be engineering price increases perhaps in the second half? Do you think that's politically feasible in the current environment?
And my second question relates to your guidance prepared based on a COVID best estimate. Would you be able to clarify, please, the underpins of that COVID best estimate? In particular, what you are assuming that in respect of the ability of SME customers to pay and the potential level of government support that, that segment will continue to receive?
Price increases. Look, we have -- our prices in Italy are among the lowest in Italy -- in Europe. So as long as the prices in Italy are among the lowest and in fact, they are on downward trend now for a number of years. This is -- I don't expect any political issue, assuming there were increases, as you mentioned. But in general, there has never been any political, how could I say, interference with prices going up or down also because they tended to go down anyway. And as I said, this is among the most competitive market in Europe. Expect rather -- by the way, expected rather than straight price increases, we give people more for more. For example, of course, you pay more if you get the sports. And by the way, when I was mentioning that we have the same content as Sky, I was obviously referring to sport content. But this -- people will pay more because they get more stuff. They will get more cybersecurity if they want to and other services. But prices, unfortunately, remains very competitive in Italy compared to other countries.
You were also asking about SMEs. Well, first of all, on SMEs, obviously, is a part of the market that has been affected. So we did not have at least -- we shouldn't talk too early, but we did not have any very large impact on bad debt or so or any significant bad debt. It's in line with last year at the moment. Of course, some of the line cancellation that we got from SMEs might be reflecting the fact that there has been a number of these businesses that have closed and have not opened yet and -- but it is difficult for us to know for certain. So yes, SMEs are the part that are suffering the most, obviously, throughout Europe, and Italy, as you know, has a number of SMEs. But as I said, it's all in the numbers that you saw, then we should see as we progress further.
Next question comes from Ms. Charlotte Perfect from Arete.
Thank you for the color on FiberCop previously and also today. I was just wondering if we could try to benchmark some of the single network assumptions around some of the FiberCop assumptions. So I suppose, thinking in particular around coverage. I think if you add the TIM FTTH plans and the Open Fiber plans and subtract and build in the areas you would get to around 90% FTTH coverage. Does that sound about right? Or is there a potential for that even to be higher?
And then in terms of margin, I think FiberCop margin of around 80% as an estimate. Does that sound about right for the single network? Or could that even be potentially a bit higher, bearing in mind, it would have a higher proportion of fiber to start with?
And then also, I say, in terms of long-term CapEx. You put in the presentation, less than 10% CapEx to sales. Could that be potentially a bit lower for the merged network?
Thank you, Charlotte. We may ask you to repeat some questions because it was really loud on your side, so it was difficult to understand the question. So basically, your first question was if we are going to go to a 90% FTTH coverage with -- if we go to the single network? And Luigi will answer to this as a start.
Well, as we mentioned before, the expected coverage moment, I think, was in the region of 76% of the country, moving over time in the 80s, 80% to 85%. Would we increase above that? We haven't -- obviously, we would have to create the plan of the single network, which we, or by definition, haven't done yet. So it's a bit early to tell you. But so I think we're not really in a position to tell you today where we would be with a single network because we would have to, first of all, go do due diligence.
But let's put it differently. Wherever there is a need for a fiber, we would put it, sure. In a sense that -- I mean wherever there is demand, we will be there. Obviously, it would not be necessary FTTH there may be places where it would be more effective to use FWA, for example. And as I said, you should expect FWA, which is becoming more and more popular technology in Italy to have a larger role going forward. So rather than saying which technology would you use, I think we [ should talk ] in terms of standard of service. We need to provide the customers certain services. And we will decide which technology is the most effective there. In fact, one of the -- if I might raise a point on Open Fiber, I would take objection to the fact that they selected a single technology, FTTH to be the one applicable everywhere, every time, all the time. Also because technology changes over time. And FWA when -- by the way, in 2016, 2015, when they started considering it, FWA was something for very few and far away. And now it's becoming extremely simple and popular. And we are pushing a lot on that.
So the short answer is, I mean, we will do whatever it's best -- today, we wouldn't be able to tell you what's the exact coverage of FTTH versus FWA or FTTC. I think we will use all technologies. And then once we will -- assuming that the deal goes through, one of the things you would imagine is that one has to take an engagement based on a plan. And that will set up all these figures.
I think you also asked another couple of questions. Yes, yes. I think you also asked about the CapEx for FiberCop. That's including all of TIM maintenance CapEx, yes, plus rollout CapEx. Effectively, the maintenance and CapEx expenditures would be borne by this company because this is a company that would own that fiber and then the copper to the customer's house. And then…
And that booking number would decide the -- a merged entity, right? If you've got less than 10%. I mean, it would even be a bit lower, perhaps long term for a merged…
Well, basically, if you consider an all fiber network, which has basically been rolled out and has completed effectively its rollout, you go to a fairly low number. Because those fiber networks tend to be pretty sturdy. They are resilient. And in fact, by the way, and they have lower OpEx and CapEx. One -- by the way, one of the trend that we're seeing in the industry, and we would like to pioneer is to move maintenance, a lot on preventive maintenance, sort of -- and maybe because I was involved with an airline earlier on. But if you do the maintenance preventing things from breaking up rather than having to go afterwards, it tends to be less expensive and much more reliable and your network stays longer on. So we quite believe that longer term, the level of CapEx goes down dramatically, but also of OpEx, again, because maintenance -- of course, maintenance of fiber, it's undisputable that is less expensive than maintenance of copper. So compared to today, we would have very significant savings on the maintenance side.
Next question comes from Mr. Georgios Ierodiaconou from Citi.
Maybe looking at the second quarter results, perhaps the one area of slight disappointment is the net adds for broadband. The line losses were impressive, but the net adds were a bit lower perhaps than the run rate you could have expected. Is it possible -- and you mentioned the voucher program earlier, but is it possible to give us an indication of how are things progressing in different tiers of the market? And whether it's something we should expect to see fairly quick progress in the coming quarters or whether it will be a slow turnaround over the next year or 2?
Okay. Your first question was about the fixed and the composition of the various sectors. Well, I think that the main feature this quarter was the very large amount of changes from ADSL to FTTC. Effectively, that was quite significant, and we expect this trend to continue. People -- especially when we roll out new cabinet center, but in general, people are upgrading their technology. And we would expect this to continue.
With regards to FTTH and the continued -- we expect a significant -- I mean now people are aware there are going to be vouchers. So you would expect that this, in the short term, might have the effect of creating almost a negative impact because if you know that there is a voucher coming and you wait a little bit, unless you're -- I used to have this phenomenon when I was at Fiat when there was incentive for a car turnover, effectively immediately before you tend to reduce demand because people tend to wait for a voucher as normal is. But we expect that to -- frankly, to continue to see an upgrade. And by the way, not only to us, but in general, the market to move to more and more. I think this year, we will have -- at year-end, we will have changed a very significant number of customers from voice only, which are remaining less and less, but still there and [ idea sell ] to FTTC and FTTx -- FTTH. So no, I don't see a change in this trend.
And then there was a second question? No. That was your only question, Georgios?
Whether the net adds will recover soon or whether it's something that may take a few quarters before we see an improvement?
Net adds, I think, would be -- would improve definitely because as soon as the voucher gets launched. Because this will have an impact on demand, especially the one without income limit. Of course, if you can have an upgrade, even if you are mobile only, you can have a significant because if you get about EUR 200 on -- considering that line can cost you, say, EUR 30 approximately, that's a large subsidy. So I would expect that will have an impact on net adds. It will increase the market as a whole. And then I would expect that it's going to be further government money going for digitalization. Not now -- this may be -- some of this will be there for enterprises rather than consumer, but it will create anyway demand. So yes, I expect that the vouchers -- to a material impact on the sector.
Next question comes from Mr. Roman Arbuzov from JPMorgan.
Can I start with one on CapEx of the fiber cost and then the near-term CapEx, being clearly highlighting that one of benefit that the fiber cost is going to drive is the potential rerating in fiber, and that's really a lot of fiber to be deployed? So can you give us just some sense, please, what does the CapEx profile looks like near term? And perhaps keeping with the tradition of these calls as they relate to the financials of the FiberCop, I'll also offer my own estimate for the CapEx. What do you think about EUR 600 million? Is that a reasonable number for kind of the medium-term CapEx of FiberCop?
We're not disclosing separately financials of FiberCop quite yet. Give us at least the time to sign the contract, and then we'll start providing separate things. But as we said before, CapEx is going to be -- especially in the first years, it's going to be consistent with the plans we've already done. And it's going to be consistent with the guidance that we've given to be within the -- originally, it was EUR 3 billion, say, EUR 2.93 billion guidance that we gave you historically. So nothing changed in terms of guidance on CapEx. And as a matter of fact, we are -- I take the opportunity also to say that we are experiencing good progress also on saving on CapEx, which people follow less than OpEx. But when you say EUR 2.9 billion or 2 -- I think the important thing is also how much stuff do you buy with this money. And for example, the 16,000 cabinets that we are rolling out by year-end, have a significant lower cost than originally expected because of different approach to how they've been built and a significant breakthrough on the cost of the equipment. So CapEx honestly, I don't see as one of the issue that we're going to have in the future to achieve our targets.
Just a couple questions on the single network and deal structure, please. The first one around consolidation of the assets, maybe just to ask that question another way is to ask, you made it clear that you think control would be best towards Telecom Italia. Do you think having control would require you to consolidate the aggregated net debt of the single network? That's the first one.
And then just the second question, please, is around equity issuance. This topic hasn't really come up in recent calls. So I just wanted to please hear your views and attitude towards equity issuance as a potential tool to achieve the various objectives that I believe you're solving for such as getting to control the combined entity and also, a lot has been said in recent weeks and days about CDP potentially increasing the stake in Telecom Italia. So what's your view about equity issuance and also in light of Telecom Italia's share price, it has been relatively depressed as well at current valuations -- what do you think?
Well, first of all, there has not been much talk about equity issuance in the last few calls. There are not going to be much talk about equity issuance even in the next ones. So we don't expect, we don't need, we don't think. So the answer is, let's not waste time on discussing something that is even more hypothetical than everything else we've discussed today.
Then you were talking about the depressed stock price. I think we are roughly in line today with the average of the sector, more or less in the last 2 years, probably a bit lower. So -- and arguably, those are not very good prices, but I would say that the sector has not be one of the positive one lately. Last year, I think we were the best stock among the large ones in the sector. This year, arguably, we have not. So we're not even -- I think we've not yet been able to appreciate -- to have investors appreciate that this company is cheap. If you go in sum-of-the-parts, for example, which is one of the techniques you guys use, it's -- and you see what the valuation we are unlocking, and that's probably one of the reason why we're doing it, then I think it's fairly cheap. But I guess, it's not up to me to discuss what's the right price. I think it's up to you guys. So I'd rather focus on the industrial part if you allow me to do that. And in fact, I hate to answer a question on, is it cheap or is it expensive or not because that's -- I have to provide you the answer to make yourself figure it. And -- but I think you know how I think about it.
I think basically, if you have control of a company, you consolidate it, yes. I guess the accounting is pretty precise, either you consolidate and you control it or you don't consolidate, you don't control it. But consolidating without controlling or controlling without consolidating, I haven't heard it yet. So I'm making a bit light, but I think it's -- I would say, it's a truism that if you consolidate the company, you consolidate all the single equity lines.
And can I really stretch it then just maybe ask a question to Giovanni, please. The 3.7 percentage points impact on EBITDA from COVID that we saw in the quarter. Can I just check, is this a net impact that includes the downside of COVID but also the good things and kind of the natural cost cushion that COVID creates from, for example, lower internal travel expenses and then lower sales and marketing, perhaps? Is this a net figure or is this a gross figure? And therefore, once we come to Q4, would we expect this figure to kind of largely disappear in full or not? This is where I'm coming from.
The answer to the first part of your question is, yes, it's a net figure. Let me understand if I understood correctly, the second part, you're asking how we see it developing for the next 2 quarters?
Yes.
Okay. Obviously, I mean, here we are talking about the impact on organic EBITDA. So this is related to the impact on the business itself, not to the one-off and not recurring that we extracted from that. And we think that the overall impact on the year is in the range of 3%. So the forecast we gave for the year includes that kind of estimate, 3 points.
Next question comes from Mr. Fabio Pavan from Mediobanca.
2 quick questions. The first one is on Brazil. I was wondering if you can provide us some more details about the potential deal structure, and also about the timing for [ finally ] implementing in the country?
And the second question refers to the cloud business. You were mentioning 2 big new clients. Can you provide us some more details about the contracts you have signed with these 2 guys?
Okay. Your first question was on Brazil. On Brazil, I think we can say that the Highline exclusivity expired yesterday night, and it was not renewed, and that we are talking -- but when I say we, I mean, the consortium, we, Telefónica -- or Vivo, basically the Brazilian Telefónica -- and Claro. So we are talking with Oi as we speak. Those are all listed companies, so I cannot comment on what exactly they're saying.
You were asking also about timing. I think we mentioned in the past, and I'm happy to repeat that basically, Oi will have to identify what they call stalking horse or say, a favorite candidate to which -- to give an exclusivity and bring it to its creditors that will have to approve in a general meeting a plan. And this plan would have to -- basically, if the plan encompass a number of activities, including the sale of the mobile. So they need to bring enough evidence that if somebody seriously interested, they can actually obtain the price that they have indicated in the plan. And that should occur in late August or so. And then there's going to be a long judicial process, which will have to certify. So it might take a year from now, let's say, I think we say last quarter of next year as a potential closing, assuming that everything went the right way. But as there -- in a discussion, as I said, in this very hour and so on and so forth, I will probably avoid commenting further on Oi, unless there's anything specific and very, very defined that you may want to ask on this more.
Then you had another question. One was on cloud. And basically, on cloud, well, what kind of question is -- what kind of contracts, we basically close contract that helped them migrate to the cloud in a certain is -- to various -- it depends on the client. For example, another client that I think it's public, it's well known, and I don't think would have a problem being named is RCS, the publisher, publishing group. Basically, we help them coming -- to bring into the cloud. We're actually building new hyperscale facilities, both in Milan and Turin. We end up having 3 regions, 1 in Milan, 1 in Rome, 1 in Turin. And there is then a number of other things that we can do together besides the cloud, which cloud in itself encompass a number of services. But we can also then -- with artificial intelligence, for example, which we are doing for some clients, obviously, with the assistance and help of our friends at Google. And I think you had a third point, no, they were 2 questions. Okay. I hope that Mr. Pavan, that I answered your question, and I will move possibly to the last question, please.
Next question comes from Mr. Giovanni Montalti from UBS.
Sorry, I understand your ideal outcome is to keep control of the single network. But can you rule out an outcome which you are actually diluted to a minority position?
I'm sorry, I didn't get the question. Can you repeat?
So I understand that your favorite outcome is a single network with TI in control. But considering the low visibility we have, are you in the position to rule out a scenario in which we actually had a tie-up between your network and Open Fiber, but TI is in a minority position?
Okay. Can we go back to the slide in which -- I'm asking my colleagues -- in which we are showing the composition of network cabinet fiber. Okay. I hope you guys see it, it's Slide #10. Okay, this is what -- you see the FiberCop perimeter. If we were to do a single network deal, we would have to have the cabinet, the fiber to the cabinet, the central offices, the fiber to the central offices. That's a hell of a lot of fiber. Then I think you can make up your own mind about the valuation of Open Fiber, a valuation of ourselves, including synergies, the present one and the additional. And then you'll tell me how you get to us at less than 51%, I'll be interested in watching your analysis. Thank you.
Okay. So the perimeter would be a different one compared to the one that you have discussed so far?
The deal will be a different one. The perimeter will be different one, possibly. Yes.
Okay. Okay. No, I mean that's -- I imagine, requires some additional complexities, considering that you have been working on, I understand, on a different perimeter so far. Is my understanding correct?
No. Mr. Montalti, we've been working on a number of things. There is no complexity in the -- life is complex. But we've been working on a while. With KKR, as we said, we're doing the secondary network. Assuming there was -- the idea of creating -- and it's not assuming. There is the idea of creating a single network in Italy, the perimeter would have to include all the fiber that are related with the Fixed. You might be surprised but we work on that as well. So we are ready to discuss…
No. No, I'm not surprised. I'm just asking. I think it's a fair question, just asking, considering the multiple scenarios. I was just wondering if you could help us understand best which scenario we are on because that -- nothing surprising. Just wanted to clarify. If I may squeeze one more in, considering I've been very quick, I've taken a very short time. And there's been some press reports pointing…
I'm not going to comment on press speculation, though, but please go ahead.
Can you please clarify whether there's been anything unusual, let's say, in the way the, let's say, Board decision has been taken yesterday? I mean how much the government internal pension was, let's say, in your schedule, in your pipeline? Was this part of the game since the beginning? Or has it been a last-minute development, let's say?
I beg your pardon?
Again, it seems that from some press reports that the last minute development, let's say, stemming from government intervention was somehow not anticipated, was a last minute one. Can you clarify whether, let's say, this is correct or whether that's been, let's say, anything unexpected, unusual in the way the Board has come up to the decision? Because I mean, you were waiting for this…
May I? Yes. Look, I am very happy to discuss FiberCop, everything. But I'm not going to go into press speculation about how the -- the Board worked very well and I take objection and in fact, no one of the directors perceived anything unusual or strange. I would take very much objection on anybody that is saying otherwise. And I think the basic objective of this conference should be that we discuss the numbers, the figures, the plans, not getting into the press said this, or the press said that. With all due respect, let's try to stick with facts and figures. And we -- the only thing that I would say that we welcome, and we've appreciated the letter from the government because -- and by the way, I noticed that one agency misinterpreted what I said before. Basically, we say that we appreciate the invitation for the government on the network to discuss a single network. We think it's very good for the country, it could be very good for Telecom Italia. And therefore, we appreciate their invitation, and I did not perceive it as an interference. I perceive it as something positive.
And with that, I wish everybody happy holidays. We'll -- we hope that all of you go on holidays. We might -- we hope to do the same. I might not be able to do it full time. And we'll be back. But as usual, Carola is in service 24/7 even during August. So if any of you needs further assistance, we have not been clear enough for some of these aspects, please call us and we'll be delighted to assist you. Thanks again for your attention, and have a nice holiday. Bye-bye.
Thank you, everybody. Bye-bye.
Thank you for calling. Ladies and gentlemen, the conference is now over.