UPDATE 1-Fastweb third-quarter profit falls 70 pct

* Q3 profit 3.9 mln euros vs 12.6 mln euros yr earlier

* Targets for year achievable, churn rate a concern

(Adds details from conference call)

ROME, Nov 2 (BestGrowthStock) – Italy’s No.2 broadband operator
Fastweb (FWB.MI: ) said profit fell 70 percent in the third
quarter, hurt by higher operating expenses and a loss of
subscribers within a business unit.

The company, which is majority-owned by Swiss phone company
Swisscom (SCMN.VX: ), on Tuesday reported net profit fell to 3.9
million euros in the third quarter, down from 12.6million euros
in the year earlier period.

Fastweb said its targets for the year were achievable,
despite the introduction of new revenue recognition rules that
had a negative impact on its 2010 results.

Fastweb earlier this year was rocked by a money-laundering
probe in which prosecutors alleged its executives knew of a more
than 2 billion euro ring that laundered money via fake sales and
purchases of phone services. [ID:nLDE61M1O2]

Fastweb founder Silvio Scaglia was arrested as part of the
probe, but the company managed to avoid the threat of being put
in the hands of a court-appointed administrator. [ID:nLDE6310GF]

A trial for executives including Scaglia has been delayed to
Nov. 23.

The company, on a conference call with analysts, said a high
churn rate — a measure of customer attrition — remained an
issue among broadband customers, though the level of churn was
increasing at a lower rate than in prior quarters.

Fastweb revenues rose 5.5 percent to 470.5 million euros in
the third quarter, as growth at its consumer unit and executive
business unit helped offset a 7 percent slide in revenues at its
small and medium enterprises unit due to a high churn rate.

Fastweb CEO Carsten Schloter also said there had been
progress in industry efforts to develop a new high-speed Italian
broadband network, but said former monopoly Telecom Italia —
which has been reluctant to join — would have to play a role.

“We think such a project has to join all the players in the
industry,” he told the conference call. “This project doesn’t
make sense if one player stays apart.”

Swisscom last month announced plans to buy the remaining
Fastweb shares it does not own for 256 million euros, taking
advantage of the Italian unit’s battered share price to gain
full control. [ID:nLDE687042]

The offer will close on Nov. 12.
(Reporting by Deepa Babington; Editing by Jon Loades-Carter)

UPDATE 1-Fastweb third-quarter profit (Read more your timing to make a profit.) falls 70 pct