TIM strategic relevance

The Company stands as a digital ecosystem “enabler”, connecting companies, government bodies and local communities, so as to create positive synergies for development. The contribution the Group makes towards growth in the sectors in which it operates doesn’t stop at infrastructure projects but ranges from digital solutions for government local bodies to cloud services for businesses, digital platforms for healthcare, applications for people with disabilities to technologies for reducing energy use by cities and companies. Various initiatives have been developed in this context, including the crowdfunding platform that receives requests for donations and other non-profit-making financial assistance for people intending to implement environmental protection and social projects.
The increasing development of digital infrastructure and services must be matched by an adequate demand for connectivity to provide a return on the investments made. This demand reflects the level of digital culture present in the country: the more consumers are informed and aware of the benefits of using the Internet and ultrabroadband, the greater the penetration of ultrabroadband connectivity and the rate of adoption of digital services. In order to promote the growth and spread of digital culture, the Company is promoting and implementing several projects, mainly through the Corporate Shared Value department: from TV programmes (Start!) to education in schools (At Digital School with TIM), popularisation of classical music (Pappano in Web) to online safety campaigns (Navigare Sicuri) as detailed in the Digital Culture chapter of this report.

[G4-DMA Product and Service Labeling], [G4-DMA Marketing Communications], [G4- DMA Customer Privacy], [G4-DMA Compliance]

Material issues in this chapter:

• network coverage
• listening and transparency towards customers
• innovation management
• sensitive data management and protection
• child protection

Relevant company policies: Service Charter and General Subscription Conditions, Selfregulation Code for mobile services and Code of Conduct for premium services, Guidelines for responsible marketing, TIM Disclosures pursuant to article 13 of the Privacy Code, Compliance requirements for the processing of anonymised or pseudonymised data, Respect Human Rights in the TIM, Whistleblowing, available at www.telecomitalia.com.

Effectiveness and monitoring: the company uses some numerical KPIs in order to monitor the effectiveness of management processes and ensure the monitoring required by quality management systems and internal control structures. This chapter presents the ones related to the cover of the territory with broadband infrastructures, customer satisfaction, the number of conciliation requests received and resolved, the number of reports received. The KPIs regarding numerical targets are presented in an appendix to the report. In particular, targets are listed for service activation, complaints, support and maintenance, availability and broadband network coverage.

ULTRABROADBAND NETWORKS: A NATIONAL TREASURE

TIM operates the biggest fixed voice and data infrastructure, covering the whole of Italy, and provides one of the country’s most extensive and advanced mobile network platforms. Therefore, in terms of size, ubiquity and infrastructural and technological assets, it is a “system company”, integrated with the territory and with the social, economic and production fabric, with a pervasive role for the whole of the country’s economy and the competitiveness of its companies, the efficiency of its public administration and, more generally, the welfare of its citizens.

[G4-EC7a], [G4-EC7b], [G4-EC8a], [G4-EC8b], [G4-DMA Indirect Economic Impacts] The Group contributes to produce approximately 0.7% of the added value of the Italian GDP1. The Group’s business generates direct work for approximately 51 thousand people in Italy; if indirect employees are considered, i.e. those operating on projects connected with the business of TIM, it is estimated that approximately 106 thousand units, corresponding to approximately 1% of employees of the entire private sector, would represent the direct and indirect work attributable to the Group in Italy.

In recent years we have been witnessing a “digital transformation” process that involves all players in the economic (changes in technology and ways of working) and social systems, with significant impacts throughout the world. This process should now be considered “irreversible” and represents the basis for the development of new business models, in turn included in new “ecosystems,” based on enabling platforms such as information systems, customer experience, analytics, intelligence, etc., which require rapid technological evolution also to ensure the rapid and secure collection, processing and exchange of important quantities of information instantly.

TIM plays a broadly strategic role in this area and is in the front line in the development of new models, both as a leading player in the ICT sector and as an enabler in other sectors of the economy, translating into products and services two keywords of digital transformation: Internet of Things and Cloud.

[G4-EC7a] TIM is aware of this strategic role and works constantly to manage and update the infrastructure and technology it makes available to the country: in 2016, the Company invested around 1.5 billion euros in innovative infrastructure and services, primarily aimed at the new generation networks. The Group’s three-year business plan for 2017-2019 confirms its commitment to investing in advanced infrastructure and technologies and is focused on next generation ultrabroadband networks in particular, a major undertaking that network technicians and engineers are working to deliver every day.

To complete the undertaking to create a new generation access network (NGAN), the Group has signed a joint venture (Flash Fiber S.r.l.) with Fastweb to promote the creation of ultrabroadband infrastructure with FTTH (Fiber To The Home) technology in the main Italian cities. Flash Fiber is 80% owned by TIM and 20% by Fastweb and its goal is to create an optic fibre access network which plans to connect around 3 million homes in the 29 main Italian cities by 2020 using FTTH technology, which permits connection speeds of 1 GB per second, for a total investment of 1.2 billion euros.

The Company has confirmed its commitment to offering the most advanced and reliable technology for mobile phones too. In 2016, the mobile network coverage of the whole country with the new 4G/LTE standard was almost completed, and in order to quickly respond to the growing demand for high speed data the Group is involved in testing 5G technology, which allows it to respond to the growing demand for ultrabroadband while on the move linked to the explosion of video content, social networks and digital services. The Group was one of the signatories to the document “Manifesto for timely deployment of 5G in Europe” presented to the European Commissioner for the digital economy, Gunther Oettinger, with which the major mobile operators, together with important technological partners, committed to develop 5G technology from 2018, focusing on its commercial launch by 2020. Moreover, TIM and Ericsson have signed an agreement to launch the “5G for Italy” programme with the aim of creating an open ecosystem for research and the implementation of innovative projects enabled by 5G technology in order to speed up the digitisation of the country.

[G4-EC8b] TIM’s commitment is also shown by its participation over the years, as the only operator, in the Eurosud public tenders organised by the Ministry of Economic Development (MISE)¹ , which are essential for ensuring ultrabroadband coverage in “market failure” areas (known as “white areas”, in which there is a risk of no return being made on investments) and therefore achieving the objective of 30 Mbit/s coverage of 100% of the population by 2020.

[G4-DMA Indirect Economic Impacts] The ambitious investment plan TIM is implementing coincides with a phase in which the Italian government is engaged in devising and implementing the national strategic ultrabroadband plan, which aims to achieve the challenging objectives of the European Digital Agenda in terms of a widespread supply of infrastructure and an increase in the demand for digital services.

In this regard, in 2016 the European Commission made the digitisation targets in the member states even more challenging: in September, when the proposal to review the “European code for electronic communications” was made, the Commission presented three strategic connectivity goals for 2025 (the related approval process is still ongoing), with the aim of satisfying European citizens’ growing requirement for connectivity and strengthening the competitiveness of Europe.

• the great socio-economic engines such as schools, universities, local administrations, etc., must have access to high speed connectivity (1 Gbps);
• all European families, in rural or urban areas, must have access to connectivity that offers download speeds of at least 100 Mbps;
• all urban areas and the main roads and railways must have continuous coverage of the 5G networks.

¹In 2016 two calls for tenders for the competitor pre-qualification phase were published for the creation, in the “white areas” of most Italian regions, of ultrabroadband networks for a total of 2.6 billion euros.