Tiscali 2013 Annual Report Download - page 7

Annual financial report as at 31 December 2013
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File Name
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Annual Report as at 31
December 2013
7
3 Report on Operations
The Tiscali Group availed itself of the faculty to present the Parent Company report on operations and
the consolidated report on operations in a single document, assigning greater importance, where
appropriate, to the significant questions for all the companies included in the scope of consolidation.
3.1 Tiscali’s position within the market scenario
Tiscali is one of the leading alternative telecommunications operators in Italy offering a wide range of
services to its private and business customers: internet access through DSL, Voice, VoIP, media,
added-value services, communication and Over The Top services.
In addition, Tiscali is active in the digital media and on-line advertising segment via its www.tiscali.it
portal and other web properties which are marketed by the concessionary agent Tiscali ADV.
With regard to broadband access from the fixed network, during 2013 a further reduction was seen in
the growth of the market (just over 1.1% compared with nearly 1.7% in 2012). Therefore, the essential
saturation of the segment is confirmed, making the price and loyalty retention policies increasingly
important so as to combat the tendency of an increase in the churn rate and gain customers from
direct competitors. During the year, Tiscali took its market share to 3.7%, up slightly with respect to the
previous 3.6%.
Dual-play access was confirmed as the most commonly used commercial proposal by consumers and
business users, even if single play represents an interesting alternative for mobile only customers.
By contrast, Internet access from mobile devices continues to rise sharply, drawn along by Tablets
and Smartphones, by internet keys and the increasingly greater development of mobile applications
both by media on-line and companies. As from the second half of 2013, Tiscali launched new and
competitive products which bode well with regard to the extension of the customer base in 2014.
With regard to the broadband access market, coverage by the traditional operators continues
(Telecom Italia, Fastweb, Wind Infostrada, Vodafone, Tele-tu) who compete in the market place with
different price, communication and added value service strategies.
As far as the on-line advertising market is concerned, despite a good first half in 2013 with a growth
trend going against the performance recorded in comparison with traditional media, during the second
half an evident curbing was seen in growth as the result of an unfavourable economic situation but
also a counteroffensive in terms of the price of the traditional media which contained the constant shift
of the communications budgets by advertising investors towards classic on-line media and social
networks.
Within this market context, Tiscali continues its rationalisation activities, for the purpose of increasing
margins and generating cash to service the commercial and financial debt, in a particularly challenging
market context and recessionary macro-economic scenario.
Tiscali continued to maintain a heavy managerial focus on the areas with high growth potential, such
as the media sector, which reported growth higher than that of the market, and Over The Top services.
Among these, Indoona and Streamago and lastly Istella deserve a special mention, the latter having
been presented during 2013.