Omnitel Network, Service, and Customer Care Investments of over 1.89 Trillion Lire in 1999 Lead to Record
Company forecasts More Than 2 Trillion Lire Investment for 2000
February 1, 2000
Stefano Lai, 02/4143.3240, 0348/3311953
Steve Fleischer (Bell Atlantic) 215-963-6822
Milan, Italy, -- Omnitel Pronto Italia, 23.1% owned by Bell Atlantic, today announced record 1999 results
of ITL7.236 trillion in revenues, a 62.1% increase compared to 1998; EBITDA (Earnings Before Interest,
Taxes, Depreciation, and Amortization) of ITL3.002 trillion, or 46.8% of service revenues; and net
profit of ITL1.662 trillion, an increase of 112.8% above the previous year after a tax provision of
The company also continued to see one of the world's lowest wireless churn rates at just over 10% per
Omnitel's results were linked in great part to the company's significant investments: ITL1.885 trillion
in 1999, 113.4% of net profits for the year, was invested to enhance network and customer care
infrastructure, and to launch new voice, data, and Internet access services.
"The high volume of investments rolled out by the company," announced Omnitel's Chief Financial Officer,
Pietro Guindani, "meant that we could offer customers a network and customer service quality level that
is beyond comparison. Our results prove that we made the right choices. In 2000 we shall be investing
even more, introducing General Packet Radio Service, bidding for a UMTS license, and endeavouring to
retain our leadership in technology and service innovation."
During 2000 Omnitel will increase its investment allocation over 1999 levels to more than ITL2 trillion.
These investments are mainly aimed at upgrading the network and customer service structures including
improvements to the GSM 900- and 1800-band networks, as well as to introduce General Packet Radio Service
(GPRS) technology that will give customers an enhanced on-line link with the Internet, data banks,
company LANs, Intranets, and other electronic services.
In 1999 Omnitel added a record 4.228 million new customers, taking the company's total customer base at
year end to 10.4 million, an increase of 68.3% compared with year-end 1998.
Corporate customers also rose sharply during the period, recording a 131% increase compared to 1998.
More than 1,400 of these customers now manage aspects of their private virtual mobile network, such as
Call Detail, Data/Fax and Internet Mailboxes, and Electronic Telephone Bill downloads through the
Internet Services menu of the www.omnitel.it website.
The year just ended featured Italy's first foray into wireless e-commerce with the debut of Omnitel's
virtual shop SpazioOmnitel On Line and Omnitel 2000, the company's wireless web portable that can be
accessed and navigated via Internet, WAP (Wireless Application Protocol), and natural- language
"Investments this year," said Vittorio Colao, Omnitel's CEO, "will also be focussed on our Internet
activities. We were the first to mark the convergence between mobile telephony and the Net with the
launch of Omnitel 2000. This will be the year of WAP technology and our customers have already shown
their interest in the potential of such integration."
At the end of 1999 about 25 million pages were being downloaded each month from Omnitel 2000, Spazio
Omnitel On Line, and the corporate website, corresponding to about 6 million unique hits each month.
Voice access to Omnitel 2000 recorded 650,000 link-ups. Figures relating to WAP and the new Omnitel 2000
services indicate significant interest in this wireless solution. Fifteen thousand customers have
registered for access through the WAP platform and about 200,000 customers had registered for Internet
services such as Internet Mailbox, SMS (Short Message Service), Stock Market Notification, and Omnitel
2000 mailboxes by the end of December. Omnitel's Stock Market service alone has 40,000 users.
During 1999 Omnitel hired a record 3,182 new staff, ending the year with 7,898 employees. Fifty-eight
percent of Omnitel's staff are women, with an average age for all employees of 29 years. Twenty-two
percent of Omnitel employees have university degrees.
Omnitel's customer care organization now accounts for 58% of the company's personnel. In 1999 the
Bologna Call Centre was inaugurated with a staff of 500 people and expansion of the Catania and Pisa
facilities increased staff in these locations to 1,000.
Attachments: 3 tables
(financial data have not yet been audited)
- from services
- other revenues
EBITDA as % of service revenues
NET PROFIT (LOSS)
NET PROFIT (LOSS) as % of
Operating Cash Flow
Change in net working
Net Cash Flow