Fitch downgrades Telecom Italia to 'BB-'

Ratings agency Moody's in July downgraded Telecom Italia's credit rating by one notch to 'B1', citing expectations its leverage will remain high and free cash flow will stay negative over the next two to three years. Italy's new government wants to bring Telecom Italia's network under state control to speed up the digitalization of the economy, Industry Minister Adolfo Urso said on Monday.

Ratings agency Fitch on Tuesday downgraded Telecom Italia's credit rating to 'BB-' from 'BB', citing absence of sufficient debt reduction in 2022. Fitch said its outlook for Italy's biggest phone group was "negative", warning that higher inflation and lower consumer purchasing power will affect the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) and its revenue.

"We expect Fitch-defined EBITDA to decrease to EUR 5 billion in 2022 from EUR 5.3 billion in 2021," the ratings agency said. Ratings agency Moody's in July downgraded Telecom Italia's credit rating by one notch to 'B1', citing expectations its leverage will remain high and free cash flow will stay negative over the next two to three years.

Italy's new government wants to bring Telecom Italia's network under state control to speed up the digitalization of the economy, Industry Minister Adolfo Urso said on Monday.