Tiscali 2001 Annual Report Download - page 153

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145
Costs for services showed overall a decrease of approximately 27% compared to the
previous FY.
In detail, the most significant line items consist of:
Leased lines costs: the sum of EUR 26mn refers to rental of the national and international
circuits used for the functioning of the data and phone network and, to a lesser extent, to
rental of interconnection kits. Costs show a decrease with respect to the preceding FY of
approximately 8.7% although there was greater connectivity capacity and an increase in
data traffic of 47%.
Costs for traffic purchase: these amount to EUR 14.3mn and are generated by voice
services and also include variable interconnection costs. The decrement reflects the
reduction in traffic volumes as pointed out in the comments on FY revenues.
Advertising and promotion costs are approximately EUR 15.3mn (showing a decrement of
54% with respect to the previous FY). The significant reduction in this type of expenditure
is due to the Group strategy adopted for the FY in question in which stringent measures
were taken to cut expenditure.
Maintenance costs: these equal EUR 5.8mn and reflect the cost of contracts for the
maintenance of exchanges, routers, servers and other network equipment (approximately
EUR 2.9mn), software (approximately EUR 2.8mn) and other plant and office equipment.
Increase is due in the main to increased investments.
Other services: these refer for about EUR 3.2mn to costs borne for the purchase of content,
for EUR 7.6mn to costs borne on behalf of other Group Companies and back-invoiced to
them, for approximately EUR 4.2mn for travel and per diem expenses. Overall, the
significant growth with respect to the previous FY is due to the difference in operating
policy of Tiscali SpA aiming not only at the development of operational activity in Italy but
also of Holding activities.
INTERCOMPANY PRODUCTION COSTS
The following costs were incurred with respect to Group Companies:
Parent Company Financial Statements
COMPANY 12.31.2001
Tiscali International BV 3,417
Liberty Surf Group SA 249
Excite Italia BV 2,023
Quinary SpA 37
Best Engineering SpA 52
Informedia SpA 24
Tiscali Telecomunicaciones SA 255
Motorcity SpA 2,902
Ideare SpA 454
Energy Byte SpA 238
Total 9,651