Tiscali 2007 Annual Report Download - page 42

Revenues by country
* THE ITEM ‘OTHER' INCLUDES REVENUES FROM TINET AND OTHER MINOR SUBSIDIARIES.
Italy
Tiscali Italia S.p.A., the Italian subsidiary responsible for all
Tiscali Group business operations in Italy, recorded revenues
of EUR 277.7 million in 2007, compared to the EUR 217.5
million in 2006, disclosing a 28% increase. In detail, revenues
pertaining to Internet access services via broadband (A
DSL) amounted to EUR 101.8 million, compared with EUR
73.3 million in 2006 (an increase of around 39% on annual
basis). Of this figure, approximately 30% was generated from
direct customers, i.e. those linked to the Tiscali network infra-
structure (ULL). 2007 also saw persistent development in the
revenues item which, also driven by VoIP services (over EUR
33 million in revenues in the period), exceeded EUR 70 mil-
lion (EUR 73.9 million, compared to the EUR 40.9 million in
2005, involving an increase of around 80%). This rise in sales
revenues is attributable to the increase in Tiscali customers
who have signed up for dual play services, i.e. joint telephone
and broadband Internet access options, and the consequent
growth in ARPU. Retail ARPU, inclusive of narrowband, broad-
band and voice services, rose from EUR 14 in 2006 to EUR
21 in 2007, disclosing growth of 50%.
In 2007, the dynamics of the Tiscali customer base in Italy
were characterized by a net increase of over 120,000 new
ADSL customers, bringing the total customers for that service
to over 552,000 (a 28% increase with respect to the end of
the previous year), of which around 331,000 are already active
and linked to the Tiscali network infrastructure (
unbundling ).
Customers who during the year signed up for the dual play
services option nearly doubled (data and voice via Internet),
passing from around 80 thousand at 31 December 2006 to
more than 170 thousand.
The customer base which uses dial-up (narrowband) Internet
access and voice (CPS) services, despite the market decreas-
ing on a general basis, remained significant (around 527,000
customers, of which more than 140,000 CPS voice customers).
The network coverage at 31 December 2007 in Italy included
around 490 full unbundling sites and 650 “virtual” unbundling
sites (see section “Significant events during the financial year”)
for a total of around 1,140 sites, involving coverage of approx-
imately 50% of the fixed lines.
United Kingdom
There was a sharp acceleration in growth during 2007 for the
UK, partly as a result of the acquisition of the Pipex broadband
and voice division in the UK, with around 500,000 DSL cus-
tomers and more than 350 thousand voice customers.
Tiscali UK, therefore inclusive of Pipex which was consolidated
as from 13 September 2007, generated revenues during 2007
for a total of EUR 608.7 million, an increase of 37% when com-
pared with 2006 (revenues totalling EUR 445.2 million). Without
considering the Pipex contribution (amounting to EUR 114.9 mil-
lion), systematic growth on an annual basis when compared with
2006 would have been around 11%.
Such performance is both the result of growth in the ADSL access
services segment (EUR 370.6 million during 2007, compared
with a figure of EUR 284.6 million in 2006, disclosing an increase
of 30%) and, above all else, the rise in voice and DSL services
(bundled options). These services generated revenues for EUR
155.1 million, more than double with respect to the EUR 70.4
million in revenues generated in 2006. The increase in revenues
is linked to the rise of retail ARPU, inclusive of narrowband,
broadband and voice services which rose from EUR 20 in 2006
to EUR 28 in 2007, involving growth of around 40%.
As a result of the acquisition of Pipex, net of Pipex customers already
present on the Tiscali UK network infrastructure, during 2007 the
customer base disclosed a significant increase: ADSL users acquired
came to more than 400,000, reaching a total of 1.829 million at 31
December 2007. In detail, an increase was seen in the retail base
of more than 450 thousand units, along with a reduction in the
wholesale base of around 50 thousand units. Increases in cus-
tomers linked directly under ULL were extremely significant (pass-
ing from around 350 thousand at 31 December 2006 to about 640
thousand) as were those for customers signing up for dual play
services (who reached a quota of 787 thousand, up by 40% when
compared with the figure at 30 September 2007).
Network coverage at 31 December 2007 in the UK included
around 800 unbundling sites (of which 760 full unbundling and
630 capable of offering IPTV services), involving market cover-
age of around 55%.
REPORT ON OPERATIONS
41
UK 67%
ITALY 30%
OTHERS* 3%
GEOGRAPHICAL BREAKDOWN OF REVENUES