- Domestic Operations: first quarter savings of 107 million euro, or 23% of the 460 million euro expected by end 2006
- Corporate: savings of 20 million euro, or 12% of the 166 million euro expected by end 2006
The chairman of the Telecom Italia Group, Marco Tronchetti Provera, and the chief executive officer, Riccardo Ruggiero, during today’s “7th Italian Conference”, organized by Deutsche Bank, illustrated the progress to date of the Group’s 2006-2008 cost reduction plan, announced to the market on 8 March.
In the first quarter of 2006, the following was achieved:
• 61% of total reductions in operating costs (deriving from the process of integration of network infrastructures and IT platforms), estimated in total at 100 million euro by the end of 2006;
• 24% of total reductions in marketing and sales costs (deriving from the process of integration and rationalization of commercial structures and compensation policies), estimated in total at approximately 100 million euro by end 2006;
• 9% of the total reduction in purchasing costs and for general/administrative services (deriving from the optimization of purchasing criteria and synergies in general and administrative structures), estimated in total at 160 million euro at end 2006;
• 8% of the total reduction in personnel costs (deriving from the process of Group staff optimization), estimated in total at approximately 100 million euro at end 2006.
At the domestic level, the Operations division has already achieved 23% of the 460 million euro in total cost reductions expected by the end of 2006, while at the Corporate level, the reduction of costs was equal to 12% of the total 170 million euro expected by the end of 2006.
Overall, by the end of the first quarter of 2006, the Telecom Italia Group had achieved 20% of the 630 million euro in cost reductions expected by the end of the year.
Milan, 17 May 2006