Tiscali 2003 Annual Report Download - page 129

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131131
SERVICES COSTS
“Total services costs” increased by 7.5% on the previous year.
The most significant line items are as follows.
“Rental of telephone lines and ports” went up by 40% as the Company took on more production capacity, particularly as regards
use of ports and connectivity.
“Traffic acquisition costs” rose to EUR 39.5 million and relate to voice services, international and mobile call termination costs
and variable interconnection costs. The increase was due to the development of Internet services using a single national number
(702) and a greater proportion of wholesale services.
“Advertising and promotional costs” fell by EUR 27.3 million. This item includes the costs of campaigns in Italy and the rest of
Europe. The reduction versus the previous year is partly attributable to the decision to capitalise ADSL launch costs (EUR 3.5
million).
“Maintenance costs” rose to EUR 9 million, mainly due to the increase in Company investments.
“Selling costs” increased substantially after an aggressive marketing policy was adopted in the telephony and ADSL sectors.
The “other services” item comprised EUR 3.5 million for costs incurred on behalf of other Group companies (and passed on to
them), EUR 1.5 million for general services, EUR 1.7 million for miscellaneous expenses relating to sales and invoicing and EUR
0.6 million for emoluments to members of corporate bodies.
EUR/000 31.12.2003 31.12.2002 CHANGE
Rental of telephone lines and ports 32,587 23,250 9,338
Traffic acquisition costs 39,477 13,588 25,889
Advertising and promotional expenses 14.686 42,017 (27,331)
Maintenance costs 9,208 7,789 1,419
Advisory services 5,951 6,396 (445)
Portal management costs 5,173 5,579 (406)
Selling costs 3,648 1,986 1,662
Utilities 1,823 1,329 494
Bank and postal charges 754 595 159
Transport costs 411 74 337
Travel costs 2,210 1,187 1,023
Other services 13,161 16,274 (3,113)
129,089 120,064 9,025