Tiscali 2009 Annual Report Download - page 35

Tiscali Group: Annual Report 2009
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7.5 Analysis of the Group economic, equity and financial position
Foreword
Founded in 1998, Tiscali is one the leading alternative telecommunications operators in Italy. With 704,000
customers, as at 31 December 2009, Tiscali is among the main providers of Broadband services with
xDSL technology (more than 570,000 customers) and voice and Narrowband services (roughly 134,000
customers). Thanks to a cutting edge network based on IP technology, Tiscali can offer its customers a wide
range of services, from broadband and narrowband internet access, to more specific and hi-tech products
to meet the needs of the market. This offer also includes voice services (VoIP and CPS), and portal and
mobile telephone services, thanks to the service supply agreement reached with Telecom Italia Mobile
(MVNO).
Following a major re-focus on the scope of consolidation, culminating with the sale of the UK subsidiary to
the Carphone Warehouse Group on 3 July, the Group concentrated its operations in Italy, offering its products
to consumers and business customers including internet access services, voice services via analogue and
Voip mode and mobile telephony. In addition, the Tiscali.it portal, with more than 18 million browsers
monthly (source: Webtrends) has proven itself to be one of the leading Italian portals, capable of acting as a
valuable and efficient shop window for telecommunications services and for attracting significant advertising
investments, thanks to the Tiscali Advertising division, one of the most important on-line concessionaires
on the Italian market.
Main risks and uncertainties to which Tiscali S.p.A. and the Group are exposed
Risks relating to the general economic situation
The Group’s economic, equity and financial position is affected by several factors which constitute the
macro-economic scenario – such as, for example, variations in GDP, investor confidence in the economic
system and interest rate trends. A gradual weakening of the economic system, together with a reduction in
household disposable income, has cut the general level of consumption, with a depressive impact on the
capacity for a quick recovery in 2010.
Should said period of economic uncertainty be drawn out, the activities, strategies and prospects of the
Tiscali Group could be adversely impacted and as a result, this could also affect the company’s economic,
equity and financial position.
Risks connected with the performance of the telecommunications market
The telecommunications market the Tiscali Group operates in is extremely competitive in terms of innovation,
price, efficiency and user support. Tiscali competes with other groups at international level and with various
local operators.
The success of the Group’s activities depends on the capacity to maintain and increase shares of the
market in which it currently operates through high quality, innovative services that guarantee adequate
levels of profitability. If the company is unable to maintain its competitive position with respect to the main
competitors in terms of price and quality and other elements, the Tiscali Group’s market shares could fall,
with a negative impact on the economic and financial results of the Group.