TIM Group (AO) | Buy | Strong execution as the company awaits the Poste offer

Research evidence excerpt

TIM Group (AO) | Buy | Strong execution as the company awaits the Poste offer

again using this year the route provided by the amended article 4 to reduce the labour cost (some

payments to pre-retirees are no longer upfront but on a monthly basis, representing a lower financial burden to TIM). The

headcount reduction run-rate can now be at c. 1,000 annually (out of c. 30.000 employees in the domestic unit). TIM also sees

upside in indirect labour cost, reducing outsourced services and payments to third parties, optimising the use of agentic AI, which

is a big upside for all European telcos.

What’s new?

The presence of Poste as core shareholder has significant advantages; on top of those already disclosed, Poste can have a positive

weight in the earn-outs, can push the gradual implementation of sovereign cloud and weigh on consolidation.

TIM believes the best option is an amicable agreement with Inwit. But in case such an agreement is not possible, the company is

prepared for an alternative route that is not an empty threat. There are no discussion with Inwit today pending the judicial

decisions.

Chances to get the earn-out from a merger of the two FiberCos remain low, but there are some chances that a commercial

collaboration between FiberCop and Open Fibre may also spark a modest earn-out before the expiration in December 2026.

The final spectrum auction setup (to be decided at the end of this year) may have a decisive influence on in-market consolidation.

Iliad is lobbying to get more spectrum (they have c. 10% of the spectrum for 16% market share), but if current spectrum holdings

are extended (potentially in exchange for higher investment commitments), Iliad may opt for a deal.

Our investment view