DAZN can affect the TIM rating

Difficulties related to the partnership with DAZN affect TIM. Standard & Poor’s In fact, it reported a long-term rating downgrade in Telecom Italia to “BB” from “BB +”. The outlook remains stable.

«Contrary to our previous expectation that Telecom Italia’s adjusted credit metrics will improve in 2020 and match the rating in 2021/22, we now expect lower revenue and earnings to raise our leverage metric.» explains rating agency.

TIM rating downgradeThis is due to weaker year-on-year domestic services revenue, slower recovery in roaming and mobile sales, and negative currency movements that continue to impact Brazilian business contributions in 2021.».

As for Italy, they add “Double the benefits of DAZN sports TV rights and coupon subsidies» Slow improvement in revenue. “We expect stability from 2022 and growth beyond, supported by broadband and ICT revenue, but not enough to reduce adjusted leverage to less than 4.0x. Furthermore, more pressure may come from new ground line player Eliade», when the competing telecom company also enters the fixed line in Italy.

The S&P decision is a new part of TIM and does not help the group CEO Luigi Gobitossi, has already been pressed by major shareholder Vivendi. In particular, in relation to the network, the rating agency reports that “AccessCo can improve Telecom Italia’s investment in fiber and strengthen its competitive position. However, poor visibility regarding the probability and structure of a transaction leads us to exclude it from our rating analysis».