Main menu


Omnitel: Revenues Almost doubled to Lit. 3,207 Billion, Investments at Lit. 805 Billion

Media contact(s) 

Omnitel: Revenues Almost doubled to Lit. 3,207 Billion, Investments at Lit. 805 Billion

8 Million Subscribers in July. 50,000 Daily Internet Accesses to New Portal

July 16, 1999

For additional

Carlo Fornaro, Omnitel Press Office

Tel. + 39-06-50065809, GSM 0348-3402811
Chantal Hamende, Omnitel Press Office

Tel. + 39-06-50065717
Bruno Manca, Omnitel Press Office

Tel. +39.02.41433163

Milan- Omnitel Pronto Italia, Italy's first private GSM operator,
announced first half results that confirm its rapid growth in the mobile
telecommunications market. Revenues almost doubled to Lit. 3,207
billion from Lit. 1,746 billion posted for the corresponding period of 1998
(+ 83.7%). In particular service revenues increased to Lit. 2,885 billion
compared to Lit. 1,495 billion in the first half of 1999 (+93.0%).

Net profit was Lit. 661 billion compared to Lit. 234 billion posted a year
earlier (+182.5%), despite a tax burden of Lit. 283 billion for the first six
months of 1999 compared to Lit. 20 billion for the corresponding period of
1998. Investments for the first six months of the year continued to grow,
reaching Lit. 805 billion (+76.1% compared to the corresponding period
last year). In the first half of 1999 Omnitel invested 121.8% of its net

EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortisation)
for the first half of 1999 was Lit. 1,294 billion, accounting for 44.9% of
service revenues, compared to Lit. 526 billion in 1998 (35.2% of service

Average monthly usage per subscriber also increased significantly from
124 minutes/month during the first 6 months of 1998 to 132
minutes/month as of June 30, 1999.

These excellent results have been achieved thanks to constant growth in
the customer base which broke the 8 million threshold on July 9th, thus
confirming Omnitel's standing as the second largest mobile operator in
Europe. The net increase in the number of customers for the first half of
the year was 1.7 million.

Growth in the customer base was achieved by keeping customer
acquisition costs under tight control at Lit. 51,000 per new customer, the
lowest acquisition cost of any operator in Europe. Overall growth in the
Italian mobile market continued to be sustained with mobile telephony
reaching a penetration rate of 42% of the total Italian population.

The growth in customers was accompanied by an increase in Omnitel's
employees, now at 6,858, over half of which are employeed in customer
services. Omnitel has recently added to its seven operational Customer
Care Centres in Italy by opening an eighth Centre in Bologna, which when
fully operational will employ some 500 customer service representatives.

The increase in the number of customers is undoubtedly due to the success
of its commercial products and services, in particular
Personal195, pre-paid Personal 2>195, Ricaricabile and Dippiu. In addition, starting this
summer, all of Omnitel's pre-paid plans support international roaming.

Significant growth was also recorded in the business sector with a 42.5%
increase in the number of customers compared to 27.3% growth in
Omnitel's overall subscribers. The success of the business and corporate
segments is due to products such as the pre-paid RAM Ricaricabile and
CAM (City Aziendale Mobile). Omnitel's offer for the corporate segment
has recently been enhanced by the introduction of RAM Integrata, which
also offers landline services to large corporate customers.

Omnitel 2000, the company's new Internet portal (, has met
with great success, with an average of 50,000 accesses daily during its first
15 days of operation. Access to the portal through voice recognition
technology and WAP will be available from July 20.

Three charts enclosed.

Operational Results

in billions of lire                       1st half 1999            1st half 1998          1st half 1997

REVENUES                                      3,207                      1,746                     680
- service revenues                          2,885                      1,495                     536
- other                                             322                         251                     144

EBITDA (Earnings                            1,294                         526                      23
Before Interest, Taxes,
Depreciation & Amortization)

EBITDA as % of service Revenues       44.9%                     35.2%                  4.3%

Net profit (loss)                                 661                         234                   (172)

Net profit (loss) as % of                    22.9%                     15.6%                 32.1%
Service revenues

Financial results

in billions of lire                       1st half 1999               1st half 1998       1st half 1997

Operating cash flow 1,026 471 7 Change in net working capital 181 71 (19) Investments (805) (457) (257) Net cash flow 402 85 (273)

Omnitel's milestones

inbillions        1st half    2nd half     1st half     2nd half    1st half    2nd half    1st half
of lire              1996        1996         1997         1997        1998       1998        1999

EBITDA (211) (183) 23 296 526 947 1,294 Net result (259) (330) (172) 32 234 547 661 Cash flow (642) (552) (273) (40) 85 342 402