Good morning, everyone. I'm glad because today we have the chance to talk about business, during which everybody's attention has been caught by information and misinformation appearing daily in the press. It's now time to let numbers and facts talk. Back in August, during the call on second quarter results, I explained the main challenges that we need to address as a management team. I said that the first one is to ensure business continues. It means that we must put the operation under control and improve our business strength. I also said that we will need to do this operating in a macro environment which is much tougher than expected, where high inflation causes new challenges. I think Q3 results show that we are on the right path, and for some metrics, even ahead of our targets.
Here, I just give you some highlights and, we will deep dive into each topic later in the presentation. Trends are clearly improving year-over-year in Q3. Group revenues are back to growth. Service revenue are further accelerating with more than half of the improvement versus Q2 coming from domestic business. Group EBITDA after lease is also going better despite domestic OpEx increase due to tough comparison on personnel in Q3 last year. Adrian will elaborate on this later, showing you that this is a specific quarter discontinuity, while the fourth quarter will be again on track. If we zoom on domestic, in the fixed market, we have a better service revenue year-over-year trend, higher ARPU, and we are able to slow down the washing machine, achieving consequently the lowest churn in the last five years.
In mobile, we have seen a huge improvement in human net adds, with the negative balance reduced to 1/6 versus Q2, better mobile number portability balance, where we are again the best performing MNO, and with churn at a new record low. We are highly focused on the execution of the transformation plan, where we target profit and loss cost cuts of 20% of our addressable base, plus extra efforts at cash level, OpEx, and CapEx, for a total of EUR 1.5 billion savings in 2024. Out of the 6% targeted OpEx reduction versus 2021, in the first nine months, we have already achieved around EUR 270 million OpEx savings. This represents 90% of 2022 target, a reassuring result indicating that we are managing the company more and more with a cash-driven logic, working on inefficiencies and attributing the right priorities.
We have already secured around 50% of the 2023 profit and loss OpEx reduction target, also thanks to the expansion contract we signed with unions for 2022-2024. On energy costs, a trend topic of this reporting season, which is creating a lot of concern for most European telcos, I want to give you reassuring messages. Our costs for 2022 are almost all hedged with fixed prices set before the energy crisis started. Therefore, we are in line with our budget. Please note that the increase is driven not so much by the surge in prices, rather by higher consumption, considering that we are expanding our network and data center infrastructure, and that this summer was very hot and we had to use more power to cool down the data centers.
Energy costs for next year are hedged for approximately 75%, including the pass-through on colocation, considering that the consumption driven by all of equipment co-located in our central offices is eventually borne by them. On top, we have launched several initiatives to keep 2023 overall consumption flat year-over-year, thanks to around 6%-7% GW savings that will compensate for growing data center and network consumption. My final remark is on the liquidity position. In Q3, we paid the last tranche of the Italian 5G spectrum, but we have also secured EUR 2 billion larger financing and cashing EUR 1.3 billion through the unit disposal. Overall, our liquidity position is sound and upcoming maturities are fully covered until the end of 2024. Also, we see no major impact for interest rates increase as the majority of long-term debt is at fixed rates.
Our business today is more stable, predictable, and healthy than it was at the beginning of the year. Our ambition now is to take it back to growth in 2023. This is also due to better condition in four markets we operate in, and this is what you can see in the following slide. Despite tough macroeconomic environment, we are confirming that finally the market is becoming more rational, as we predicted at the beginning of the year, and we are now seeing several positive signs in all segments. We are not magicians, and our behavior was an accelerator for this result. In the consumer market, operators are increasing prices both from fixed and mobile, also in order to pass inflation to final customers. The migration to FTTH is happening.
However, FTTC is still a reliable technology growing year-over-year and remaining at the market share on new adds around 55%. Let's remember that more than 67% of our FTTC lines go beyond 100 Mbps. Mobile number portability market is cooling down, so the washing machine is now less relevant. Again, as we predicted at the beginning of the year. In the corporate market, cloud migration is accelerating both on private and public administration segment. At the same time, connectivity is still broadly stable year-over-year. In this segment, we are growing more than the market. In the wholesale market, fiber adoption is still growing healthy both in FTTC and in FTTH, despite at a slower pace versus previous quarters. In Brazil, market consolidation is in progress, and we are seeing a more rational competitive environment.
The ICMS tax reduction is fueling customer spending power and creating additional demand. Next slide. On the following slides, for the first time, we provide an update on the four entities outlined at the Capital Market Day. We give you full disclosure of KPIs and financial metrics in February once we present full year results and the 2023/2025 plan. Let's start from TIM Consumer. The turnaround is ongoing. We see improving trends both in fixed and mobile. As commented before, the market is cooling down. This is something we have stimulated in the last quarters as it enable us to retain high ARPU customers. We will further support this trend with the introduction of price indexation on new contracts from year-end.
We have selectively priced up our customer base with very low incremental churn, while the revenue uplift will be sizable, so expect more to come of such action in the coming months. Other positive notes are the increase of our market share in FTTH, which has gone from fourth to first position in two quarters, and the stickiness of TIMvision customer base despite the exclusivity on football has gone. TIM Enterprise is developing according to expectation, which means it is growing steadily and faster than the market. We continue to see strong demand for ICT services with a growing pipeline across the board. Needless to say, the recovery plan tenders we secured this year and National Strategic Hub are growth engines and may even deliver unexpected upside in coming years. Also, new contract of TIM Enterprise will be CPI-linked. NetCo is moving forward with FiberCop plan execution.
FTTH rollout is on track. On the wholesale front, we have new wholesale tariffs under public consultation that take into proper account the inflationary environment, finally reducing the gap versus other European markets and incentivizing faster migration towards fiber. TIM Brasil growth has further accelerated. Q3 was the first full quarter of integration of Oi, while in Q2 we had only two months. Both service revenue and EBITDA increased more than 24% year-over-year in local currency. This business is definitely performing up to expectation. Before we move on, some additional consideration. It feels that my tenure at TIM started a long time ago. However, I was appointed CEO in January, and it has been just four months since we presented our new plan and our team. During this period, we have been working hard to execute our long-term strategy.
In recent weeks, it has become clear that the timeline of this project has been impacted by the unexpected evolution of the macro and political environment. The strategic option that we outlined at the Capital Market Day back in July are underway and remain our North pole. The long-term strategy is confirmed. We continue to work hard to fully implement it. More specifically, on TIM NetCo, as you know, we extended the deadline of the MOU to the end of November. However, exclusivity has not been renewed, as we want to have the flexibility to conduct parallel negotiations from now on should the opportunity arise. On TIM Enterprise, the process to set up the legal entity has been approved. We are fully committed to go ahead with these two projects. Let's now zoom in each of the four entities.
At the Capital Market Day, we were very transparent in saying that TIM Consumer is a turnaround case that represents the biggest managerial industrial challenge we are facing. However, we also expressed our conviction that this business has significant potential and are confident that we will succeed in making it industrially sound. Of course, the journey to fix the core, transforming our consumer and SMB business into an agile, efficient, and commercial flexible premium player has just started. Let me say that we are pleased with the achievement so far. On the top right corner of the slide, we show that TIM Consumer overall is a business with total revenues still declining high single digits year-over-year, and service revenue down 7.4% year-over-year in nine months. However, if we see a better trajectory in Q3 and improving operational trends both in fixed and mobile.
Q3 where negative net effects have almost halved compared to previous quarters, with a further deceleration in September. Churn is down to the last year level. In mobile, churn is at a new record low. Mobile number portability trend is steadily improving, and line losses are down 80% quarter-over-quarter and 75% year-over-year. We have kicked off a lot of initiatives, from new communication to radically different incentive schemes, from higher focus on digital channels, to a more daring approach to how we extract value from the customer base. In a nutshell, what we have done in this month is to steer the business from volume to value. All the action you see on this slide are in accordance with this approach. I will comment only a few. We are enhancing TIM's premium brand and market positioning.
The communication campaign we did in recent months has been very successful to revamp the brand. We have also launched the first-ever 10 Gbps offer available in the Italian market while switching off the less popular offers. Selectively pricing up our customer base is proving to be a healthy practice. Limited churn on one end, sizable upside on the other, with a run rate of EUR 50 million incremental revenues combining mobile and fixed. Considering the untapped potential still lying in our customer base, do expect to see us more active on this front in coming quarters. So far, we've addressed less than 20% of our customers. Competitors have also been quite active in back book repricing and recently also on front book prices. In a nutshell, the market is moving slowly but steadily towards higher rationality.
The volume to value approach is paying off also in our content business, where TIMvision customers have increased year-over-year, and the number of paying customers for football is 44% higher now than it was one year ago, despite we have given away exclusivity. Concurrency has been removed from November the first, and hopefully this will translate also into a higher market in terms of viewers that will be beneficial also for us. The introduction by year-end of inflation-linked contracts for the new retail customer is another building block of our strategy. Passing inflation through the customers is common practice for virtually all industries. Honestly, we see no reason why we should behave differently. Let me make a final remark here.
Our telco industry has the same VAT of the luxury sector, while this is not the case for utility services that are treated as primary goods. In Brazil, this is something that has changed recently, for example, and we hope to see the same changes here in Italy. In the nine months, TIM Enterprise total revenues are up almost 6% year-over-year, and service revenue almost 9% year-over-year. With a mix where the moderate decline in connectivity is more than compensated by cloud, IoT, and security. The combined weight of ICT business has increased 5 percentage points from 51% to 56%. Overall, we confirm and reinforce the messages of the Capital Market Day. The business is growing faster than the market, with cloud being the main driver.
Connectivity is down year over year, but we have contracts already signed that are incorporating a double-digit growth in this line. Over 60% of revenues in 2025 are already secured and will further improve. The visibility on growth trajectory is very high, considering EUR 1.1 billion cumulative value from the National Strategic Hub and EUR 200 million from the Connected Schools healthcare tenders that we have been awarded. Furthermore, we have over EUR 1 billion of public administration contracts in activation, and the pipeline of ongoing negotiations may deliver up to EUR 600 million additional revenues. A significant part of the growth is coming from top 35 customers, an indication that TIM Enterprise is indeed a natural reference player in the Italian market, uniquely positioned as an infrastructure-based ICT player capable to exploit the telco and IT convergence.
That is why we do not suffer the drawback that other European telcos have reported recently. We see multiple potential upsides to upselling and cross-selling, for example, on the public administration that will start the migration to cloud in Q1 2023. My final remark is that also TIM Enterprise new contract will be CPI-linked. At the Capital Market Day, we presented a timeframe articulated in three major steps. From foundation until the end of this year, followed by 18-24 months for the evolution in a standalone company with its own infrastructure and ICT capabilities, and then an acceleration phase leading to EUR 5 billion revenues by 2030. The initial phase is on track to create a separate legal entity with an integrated operating model and clear interfaces versus the broader TIM Group. Slide nine.
In the nine months, net customer revenues are down 4.8% year-over-year, and service revenue 3.8% year-over-year. Let's put this performance into context. In the year-over-year comparison, there is 3.2 percentage points drag on total revenue and 1.7 percentage points drag on service revenue due to non-repeatable transaction in [FiberCop] last year. Future trends are significantly better. More in general, at the Capital Market Day, we said that next, total revenues were expected to slightly reduce in the midterm and then recover as a mix of the loss of volumes and the evolution of regulated prices that would incorporate a link to inflation. If you look at the overall market has slightly decreased year-to-date in terms of total access line. There is no surprise in the number we report today. The trajectory is in line with our expectations.
Of course, the news here is the new approaching wholesale re-regulated prices for the next year. Copper prices to increase, those for full fiber connection to decrease. Let me repeat what I said at the beginning of the presentation. In the proposed regulation, we basically seek two things, a strong incentive to accelerate the migration to FTTH, a reduction of the gap between the current tariffs for copper services versus other major European markets. Should the proposed prices be confirmed by AGCOM on local loop unbundling, Italy will finally realign with France and U.K., considering the automatic CPI link mechanism, but will still be behind Germany. On sub-loop unbundling, the gap will reduce, but will still be behind this market. In any case, in the existing plan, it wasn't included.
More importantly, and this is my main message on this topic, we do hope that the market will react rationally, taking this as an opportunity for repricing also in the retail market. Slide 10. In the nine months, TIM Brasil total and service revenues increased well above 18% year-over-year. Being the first quarter benefiting from three months of post-integration, in Q3 growth further accelerated in mobile. Also, fixed saw an improving revenue trend. Actually, all profit and loss lines were up year-over-year. KPIs show strong trends across the board. Mobile ARPU is flat and churn is down more than 2 percentage points versus Q2, while the incumbent in Brazil reported 6% year-over-year ARPU and 5% year-over-year customer base growth. There are several drivers of this performance. To name just a few, I mention the ongoing migration of over 16 million mobile customers, which is proceeding according to expectations.
The rationality of the market with all players pricing up and the ICMS tax reduction, most of which will be passed through the customer. All of that creating additional demand. On top, TIM Brasil 5G coverage arrived in all state capitals with a number of antennas that is higher than its peers combined. This create new commercial opportunities and enable to speed up 4G offloading, thus increasing the overall quality of service. Slide 11. Just a quick recap on our ambition in terms of the transformation plan. The end game is to rethink the entire operating model to achieve a more sustainable cost structure with around EUR 1.5 billion cash cost saving in 2024. The mix will be around EUR 1 billion of profit and loss addressable cost reduction that represent the 20% target we have already provided to you in May.
Around EUR 250 million of extra cash cost savings, mainly related to leases. Lastly, around EUR 300 million of CapEx savings already starting from 2023 that will help us to mainly absorb the increase in gross CapEx we are having from NRRP initiatives. The target for 2022 is to save EUR 100 million of labor costs and EUR 200 million of external OpEx for a total of EUR 300 million or 6% of 2021 addressable baseline. In the nine months, we have hit 100% of the labor cost savings and 85% of other OpEx, so we are at 90% of the full year target. For 2023, around 50% of profit and loss, profit and loss OpEx reduction target is secure, also thanks to the expansion contract.
As you can appreciate, we are working on many things in order to regain efficiency, from real estate to customer care to channel mix, just to name a few. Let me now hand over to Adrian, who will guide you through our financial results. Adrian, please.
Thank you, Pietro, and good morning, everyone. Slide 13. If we look at our key financials, in Q3, we reported improving trends versus Q2, continuing the positive evolution registered in the previous quarter. Group service revenues year-on-year trend was positive at 3% from 1% year-on-year in Q2. In the nine months, group service revenues stood at +0.5% year-on-year. Group EBITDA was down at -6.5% year-on-year from 8.5% in Q2. We worked hard during the first nine months of the year in order to improve our results compared to our projections, and we succeeded despite the present tough macro environment. Equity free cash flow was slightly negative in the quarter, partially driven by the operational trend.
I want to highlight that the year-on-year comparison is negatively affected by a positive one-off effect in 2021 in the financial charges. Equity free cash flow in the nine months was positive at EUR 251 million, with operating free cash flow net of license fully covering financial expenses. Net debt after lease increased in the quarter, mainly due to the EUR 1.7 billion cash out for the last installment of the 5G license in Italy, that was not entirely compensated by the receipt from the disposal of the stake in INWIT. Let's now have a look at quarterly trends in the next slide.
As you can see, group service revenues grew 3% year-on-year, with an improving trend versus Q2, thanks to a higher contribution of Brazil after full integration, but also better trend at domestic level that improved further after Q2 at -3.5% year-on-year, versus -4.8% year-on-year in the previous quarter. Group EBITDA after lease was down 11.2% year-on-year, with domestic -18% in line with Q2. Net of last year non-repeatable items, the decline for the quarter in domestic EBITDA would have been a single digit. CapEx were slightly down this quarter year-on-year, notwithstanding the push on growth investment mainly in FTTH, with 400,000 households passed in the quarter in line with the previous quarters. In the nine months, group CapEx are up 5%. Moving to fixed in the next slide.
Fixed service revenues were down -3.9% year-on-year, improving sequentially versus -5.0% in Q2, with around half of the contribution to decline explained by retail and around one percentage point each by international and national wholesale, with the latter improving its trend after a tough first half impacted by non-repeatable transactions. Retail was just a touch lighter year-on-year versus Q2, but with resilient ARPU level and improving KPIs on net adds. Indeed, ARPU was up 6.2%, driven by broadband and content revenues and the ICT that keeps increasing double digits. In terms of market, we continue to see 2022 stabilizing after 2020 and 2021 growth, fueled by vouchers and COVID, supporting lines, broadband net additions and equipment.
For these reasons, retail KPIs are weaker, but with an improving trend quarter-on-quarter, with the highlight being the continuous improvement of the churn level trend, now below 3%, combined with a historic low level of delinquency. At the same time, equipment was significantly down year-on-year this quarter, but in line with Q1 and Q2 trends. I remind you that this is neutral in terms of cash. Moving to mobile in slide 16. Mobile service revenues were down 2.2%, improving significantly compared to the -4.1% in the previous quarter. Retail reported a negative revenues contribution coming from lower customer base, but in any case improved quarter-on-quarter. This has been partially compensated by the positive contribution coming from wholesale revenues for higher roamers and MVNO revenues.
In terms of market dynamics, MNP decreased again with the churn at a new record low, notwithstanding with some selective price increases done in the recent months. We are reiterating this approach as a good practice, both to counterbalance the recent inflationary pressure and as Pietro commented, additional actions are likely to come in the coming months. Next slide. On slide 17, we have details on OpEx that were slightly up year-on-year for Q3, affected by some discontinuities on labor costs. More specifically, variable costs were down year-on-year, mainly for lower equipment, partially compensated by higher costs related to ICT growth. Commercial costs decreased 3% in the quarter. Higher commissioning content and VAS costs have been more than offset by lower bad debt, customer management, and advertising.
Industrial costs were up year-over-year due to higher energy costs in line with our budget, as we will show you in the next slide, and provisioning costs not fully counterbalanced by lower network maintenance costs. G&A was also slightly higher year-over-year due to ICT revenues growth. Finally, labor cost was up 17% year-over-year this quarter, mainly for tough comps due to the release of provisions last year related to one-off bonuses not distributed and lower solidarity base Q3 this year versus last year. This trend in labor costs was already expected in our forecast.
Indeed, if you look at the nine months, the trend shows a healthy - 1% in labor costs. I also remind you that on labor, we are well covered also for the coming two years because we have signed an last year, three years agreement with unions, including a pre-agreed 1.5% increase per year. Next slide. I already anticipated that energy is currently under control. Obviously, we are exposed to the same challenges the whole industry is facing, and so far, we have been able to manage the risk quite effectively. I just want to remind you that this year energy costs will be in line with our budget defined before the war and subsequent energy crisis started. I also want to add some color on what we are doing for 2023 on top of the 75% hedging, if we include the pass-through on colocation.
For next year, our goal is to keep overall consumption flat year-on-year, thanks to the 6% or 7% GWh savings that will compensate for growing data center infrastructure and network expansion, both fixed and mobile. Areas of saving will span from fixed infrastructure that will benefit from decommissioning, to mobile network with selective real-time switch off of unused frequencies and 3G sites. From data centers, where we will introduce new storage technologies that will enable us to buy energy during the night and utilize it during the day, into offices where we continue to rationalize spaces and we continue to heavily adopt working from home. Now on slide 19, you have details on TIM Brasil. The company reported another strong quarter, and you can find many details in the company's disclosure done on Tuesday.
It is important to highlight the main achievements of this quarter. The top line expanded 24% year-on-year in the quarter, with EBITDA growing at 24% as well after the consolidation of all numbers at the beginning of May. Furthermore, the company continues to post significant levels of cash flows with EBITDA CapEx on revenues are at around 30% for the quarter. As you can see from the numbers, TIM Brasil is now fully benefiting from all mobile integration and posted a strong organic performance focused on customers value strategy that continues to pay off. Last nine months have been transformational for Brazil with important achievements, and we believe the company will continue to deliver high levels of profitability, creating value for its shareholders. Next slide.
Net debt actually increased by EUR 2.5 billion from year-end 2021, EUR 3.3 billion on IFRS 16, mainly due to the payment of the 5G licenses in Italy this quarter and for the acquisition of Oi's mobile and 5G license in Brazil in the previous one. Effects already anticipated in our plan presented in March. As anticipated, equity free cash flow was slightly negative in the quarter, but still positive in the first nine months of the year. You may have noticed that the company decided the revocation of the goodwill tax realignment. As you know, legislation changes have materially worsened the investment profitability of the tax realignment, and on top of it, we have performed a new round of analysis given the significant increase in interest rates, and the results proved the scheme not to be viable any longer.
Therefore, we have decided to revoke like many other companies. On the timing of this decision, please note that the rules for the revocation were disclosed only at the end of September when a specific decree was finally published. The provisions there included rules that the substitute tax already paid to be offset against any other tax payable with no cap limit. This implies that between the credit for the payments carried out and the cancellation of the payments due, the overall effect is an improvement in the cash flow of the company of around EUR 700 million in 2022 and 2023. An important amount given the present levels of interest rates.
On the other hand, of course, we have completely written off the deferred tax asset, and this has had a negative impact on our net income of approximately EUR 2 billion, but has also allowed us to cancel the tax suspension constraint on all of our reserves. In slide 21, you can find a summary of our debt maturities and the breakdown between fixed and variable rates. Three main messages here. One, our liquidity position is strong, and we cover upcoming maturities until the end of 2024. I also want to assure you that we're working on further actions to enhance it. You will have more information on this point in the third quarter. Two, average maturity of our debt is long, at almost six years. Three, around 65% of our medium long-term debt is at fixed rate following the cash in of EUR 2 billion from SACE.
That is at a variable rate giving us the opportunity to keep our average cost of debt at a healthy 3.7% despite the significant increase in interest rates and spreads. With this, I will hand over to Pietro for his final remarks.
Thanks, Adrian. Now, the closing remarks. TIM continuity plan is proceeding. We promised to do better than forecasted, and we are keeping this promise despite a tougher macroeconomic environment. You can see improvement on all metrics and with positive outlook, both on financials and on KPIs. Guidance is now comfortably in sight, and I leave the math to you to increasingly compute our Q4 trend. In terms of market dynamics, signs of rationality are consolidating, and we think there will be more to come in the future. We continue with our strategy from volume to value. That remains strongly in place. I'm happy to see that at the same time, we are seeing the operational rebound accelerating. On the de-leveraging plan, implementation is ongoing, and we will release our pro forma balance sheet at our full year 2022 results.
The memorandum of understanding on NetCo has been extended to November the 3rd, with now no exclusivity obligation. On TIM Enterprise, the legal entity setup process already approved. With this, we have completed our presentation. Let me now hand it over to the operator for the Q&A session. Thanks.
Q&A session is now open. If you would like to register for your question, press star followed by one. If you would like to cancel your reservation, press star followed by two. First question comes from Mr. Giorgio Tavolini of Intermonte. Mr. Tavolini, please.
Thank you and good morning, everyone. Just a few questions from my side, if I may. Regarding the revocation of the tax scheme and the EUR 700 million extra income from the reversal of the substitute tax system. I was wondering if you see any scope to restate the distribution dividend for the current year and for last year based on the new level of distributable reserves, that you see as a TIM parent company. The second one is, regarding leverage. Based on your current outlook, if you can elaborate on your expectation for year-end net debt. The third one is on Brazil. I was wondering what level of synergies with Oi do you expect to materialize on your equity free cash flow from Brazil in the current plan.
Just to repeat, saving share dividend, leverage at year-end and Brazilian synergies. Thank you very much.
Hi, Giorgio. Good morning. I leave the stage to Adrian. In any case, just as a joke, also the operation are going very well and the numbers are showing that we are on the right path. Now I leave Adrian the stage to answer.
Yeah. Good morning, everyone. Hi, Giorgio. Yeah, regarding the first question, clearly, yes, this is a side effect in the decision of the revocation of the deferred tax asset. At the end, you know, legislation has changed. The context has changed. Today, if we compare this. Let's consider it investment in terms of payback period is well below some other topics we need to do, for example, in our business, in our network, in different things. So that's that was mainly the decision for the revocation. Clearly, it has a positive effect in 2022 and 2023 in terms of cash flow. It's clear we disclose it. It's probably a bit more, a little bit more, EUR 700 billion.
Yes, it has also this side effect of unlocking the reserves that were locked for tax purposes. How this can be considered in the future regarding the savings shares, this is probably a decision that the board will take in March with the year-end financial statement. Anyway, it's important always to remember that in the absence of positive net income, there are no privileges from the savings shares over the ordinary shares. Again, yes, and your assumption is correct. We are unlocking also the reserves, and we will decide in March when we will discuss the 2022 financial statement.
On the leverage side, well, you know, we've been doing much better than the expectations, even our initial expectations in March, in terms of equity free cash flow. Clearly, 2022 was a very particular year because there were many extraordinary effects, such as the licenses in Brazil and the big payment for the license here in Italy. The closing of the deal with Oi, so that's the main effect of the increase of the debt since the first of January. Going forward, the fourth quarter particularly we have good expectations. If I need to mention something, I think that the EUR 20 billion area is for a year-end something that we think we can forecast.
We'll see because this, you know, being a reported number, it's always open to the exchange rate oscillations. Anyway, we are somehow optimistic about the evolution in the fourth quarter of the cash flow. The last one, yeah, Brazil. I think that Pietro then implemented a lot in terms of operational side of Brazil. At the end, we always mentioned that the Oi deal was an infrastructure deal, basically. Synergies will come, especially from that side. At the same time, we are already seeing what a more, much more efficient market can bring to the operators. Today, Brazil is a three-player market on the mobile.
It's a market that has been very positive in terms of revenues evolution. But at the same time, it's a market where operators want to invest because the evolution, the return on investment is clear. So that was our case at the time we decided to go for this to bid this deal for Oi assets. And we think that the synergies are already clear, and will be much clear when the company start with the decommissioning of the additional sites. But anyway, today, if you consider the equity free cash flow after lease, so the most accurate measure in terms of cash flow. On revenues, Brazil is delivering 15%. And you know, this kind of a network.
If they manage to perform what is in the plan, this will be even higher. Again, we think that the synergies are already clear, let's say. I don't know, Giorgio, if that answers.
Oh, it's very clear, Adrian. Thank you.
Okay. Thank you.
Ciao, Giorgio.
Next question comes from Mr. David Wright of Bank of America. Mr. Wright, please.
Yeah, thank you very much for taking my calls, guys. Just on the presentation and your comments on inflation linking and consumer and enterprise contracts. I think on slide seven, it says contracts inflation linked by 2022 with effects in 2024. Could you just explain that to us? When does the actual inflation kick or drop into the actual revenue, the actual price itself? I'm just a bit confused by the end of 2022 and effects in 2024. Could you just explain the inflation of the contracts? Thank you.
Hi, David. To be clear, what will happen by the end of this year, we will apply in the contract of the new customer, the inclusion of a specific clause to recover the inflation. It will happen both on consumer and on enterprise segment. What we'll do on the existing customer base is that we will price up on the consumer during the year, based also on the duration of the contract. Because a changes in the clause mainly on the fixed, for example, could mean a possibility by the customer to cancel the contract. I don't have to remember to you that mobile is based on prepaid, where you have no commitment in terms of timeframe of the contract. Adrian is already working on a progressively price up of the customer base based on a CVM approach.
You have seen that we are able to price up, reducing the level of drawback in terms of churn. When we discuss about fixed on the consumer, the customer have usually one-year contract obligation. If you change some specific clause, they have a right for cancellation. The idea is that we put the clause starting from the end of 2022. Why the end of 2022? Because if you do that at the beginning of 2023, what will happen is that you have to change based on the inflation of 2023, and we know that. We hope that inflation in Europe, it will be not something like South America. On the remaining customer base, Adrian is already planning to price up the customer base based on a targeting, in a targeted way to avoid an issue.
What is important is also to remember that we are not moving only on the inflation. We are moving toward a more rational market. I don't have to remember that the price of TIM in August 2021 for the fixed was EUR 19.90 for the FTTH with also the content. Now we've increased the price to EUR 29.90, and we are no more advertising this offer. We are advertising the 10 Gb offer because we want to stress that as a market leader, we are driving a process to increase the level of price. And also with this increase, Italy continues to be one of the country with the lowest price for fixed and mobile. Our move is a move that is important because it sets the market trend.
If you remember, David, we were discussing a few months ago, not two years ago, about the fact that could be true that the market in Italy could follow a more rational approach, and it is happening. Okay? On the enterprise segment, what will happen is that again, in the new contract, let's remember that on the enterprise segment, usually we sign contract for three, five or seven years. So it's quite normal that now we will include in this kind of cost of inflation. On the customer base, we'll follow two different approach, public administration and private. Because the public administration, there are some public bid on which we have less leverage, and we are discussing to include in the new bidding, the inclusion of the inflation rate. On the private, it will be a leverage to try to increase our portfolio of services.
What I mean, sometimes for us it's much better to convince our customer in TIM Enterprise to avoid the increase on the connectivity in terms of inflation, and buy further new services that are really important for our strategy in TIM Enterprise. I hope that I was clear, David. If not, please.
Yeah. I might follow up. Okay. Thank you for the moment.
Next question comes from Mr. Fabio Pavan of Mediobanca. Mr. Pavan, please.
Yes. Hi, good morning, all. I'll try to make two, just two questions. First one, follow up on the market evolution, so let's say on the business. How the others are behaving, and do you think they will follow you on the intention to link contracts to inflation? Just to mention one to some point.
Fabio. Sorry to interrupt you. Can you go more slowly because you are. I'm unable to catch you.
Okay. Let's start from scratch. On the operation, from the business, how other players are behaving in this market, do you think they will follow your move on CPI links? Do you think they are becoming more rational as well also in the lower part of the market, mainly on mobile? I think fixed it seems something is already moving. Second question, if I may, is on the enterprise business, on the cloud. It has been a very good acceleration and is becoming relevant for enterprise. The question is, are we talking about new clients or replacing for all new business opportunities existing client base? Then the third one, again for you, Pietro.
5G is becoming clear part of the strategy in mobile, as also shown by your presentation. It seems so far you are not mentioning 5G and when talking about Italy. In my understanding, this could fit very well with a modern value strategy, with your strategy. Why is that? Is it too early? Is it something that you may elaborate in the future? Thank you.
Okay, Fabio. For sure, I cannot put myself in the shoes of the other player, but we think that more or less everybody will follow because the inflation, the pressure on the cost base that we have is common to everybody, so it's quite difficult for Iliad to continue to compete in the market without doing that. Mainly on the fixed, our proposal to put inflation on the old same price will be another, let me say, pressure towards everybody. Also we think because in the replicability we use our own fixed price to increase price. If everybody stay rational, everybody will do that. Why I trust the market will be rational? Because if you see what's happened in the last three months in terms of new offers, everybody increased price.
Just to give you an idea, and I don't want to scare anyone, we did a stupid calculation based on the official number that were released by AGCOM and by the other, all the players. If you look at the trend of the revenues of all the industry, the sum of the parts, the trend of CapEx in terms of level of CapEx and the trend of EBITDA, the risk is that in 2024, the Italian telco industry will be EBITDA minus CapEx negative if they continue with this trend. Due to the fact that none of the, our companies is a charity institution, everybody must get back to rationality. But again, this is exactly what I was stating some months ago, and this is what's happening. I cannot assure that it will continue like that, but at least there are real signs of rationality.
Moving to the enterprise, your second question. What's happened is that, as Elio always stated, we have already 20% of our customer base that buy from us all the services, connectivity, cloud, and cybersecurity. What is happening is that the cloud is something that we are adding in our portfolio, and we think that our main leverage is the fact that we will offer to all our customer a turnkey solution. If you buy separately, connectivity, cloud, and cybersecurity, and you buy from three different players, you will keep the headache to understand where the problem is. While if you choose us, you can do that. In any case, one of the trigger for this acceleration is the public administration. I think that the move toward the National Strategic Hub is becoming a clear indication to all the public administration to move towards this more future-proof technology.
For us, it will be an important element in terms of growth. We are not showing already all these elements, but I think that we'll have good surprise in the next two, three years. If I may, sorry, about Enterprise. When we presented at the Capital Market Day our number, one of the main question was, "How can you perform better than the market?" Today, we are performing better than the market. We are growing at a pace rate that is higher than the market. Are you able to sustain the decrease of connectivity that is happening through Europe? In some way, whatever is to be lost was already lost. It doesn't mean that connectivity will be flat, but it will happen that we will be able, compared to other player in Europe, to keep the level of connectivity at a more sustainable trend.
What we are doing is we are moving all the licenses to the cloud. Let's remember, Elio and the team don't have to be to work as an evangelist explaining why the cloud is important. All the main hyperscaler, Microsoft, Oracle, so on and so forth, are moving all the solution from on-premise to cloud. So we have to go there and be ready when they will explain to all these big customers that have to move in the cloud, that we will be there with our connectivity, our security system, but with our cloud. Fifth question, 5G. If I may, five years ago, Italy was telling that we are the first country to move towards the 5G. The choice was increase at maximum level, the level of frequencies cost. Let's see if the player will have enough money to invest.
Because it's very difficult today to define how we can materialize advantages from 5G. Today, on the consumer side, 5G is a technology more efficient than 4G, but is not a lever to increase the level of revenues on the consumer. Brazil did a complete different choice in terms of industrial policy. The price for frequencies was very cheap. It was among the lowest in the world. With a commitment, I was there to negotiate with the Brazilian government this issue, this element, a commitment to build a 5G network. Compared to Italy, what's happened? Low cost of frequencies, while a strong commitment to build a 5G network on the Release 16. That is the standalone one. This is much more performant than the traditional one. Now what's happened is that we will start to work on the 5G.
It's important to remember, we have to work mainly on the segment of Elio on the enterprise one, because 5G is technology that is very important for a B2C business model. For the B2C, we have to find a way to monetize better 5G. Now we are not in a hurry to invest and build as fast as possible a 5G network. We have to evaluate also if to build a new network could be driven also by some network sharing agreement. Italy is not a country that can sustain five different mobile networks. It is a further statement that allow me to say that I think that in Italy, in the following years, there will be, in any case, a market repair. It could be. At network level, in terms of network sharing or at company level.
I hope that, Fabio, I was clear enough.
Super clear. Thank you. Thank you very much.
Next question comes from Mr. Luigi Minerva of HSBC. Mr. Minerva, please.
Yes, good morning, and thanks for taking my two questions. The first one is on the single network. I'm sorry if I divert the attention from the good results to talk about the soap opera. I wanted to ask, essentially, you know, the government, the new government seems to have different views about how to achieve the single network. How do we reconcile what the government seems to be willing to achieve with your plan A? Perhaps related to this, I get to notice the update on the MOU and the lack of exclusivity to CDP.
I'm wondering whether this lack of exclusivity is just, you know, a theoretical aspect because eventually any deal on NetCo would have to be approved by the government as part of the Golden Power, and clearly the government and CDP are aligned. The second question is on towers, and it's more a strategic one on ownership because obviously, you know, the management team now finds itself in a situation where there is no longer control on towers in Italy. I'm wondering, yeah, what Pietro, what do you think about this, whether you're comfortable not owning the towers?
Particularly if you think about the MSA that regulate the relationship between TI and INWIT, whether you are satisfied with the current MSA, or you see room for improvement given that, you know, the environment has changed, with higher inflation. Thank you.
Thanks, Luigi Minerva. Don't worry. First correction. I love Brazil, so I shouldn't call soap opera, I should call telenovela. Again, I'm joking also because we have to de-stress all this focus on something that is proceeding in a rational way. What is happening? I really apologize, but I cannot answer in the name of Italian government. I'm ambitious, so I would like to be prime minister, but today I'm the CEO of a company listed on the stock exchange, so I can tell whatever happened inside my environment. On this area, what is happening is that we prorogate the MOU with CDP. If you were in our shoes, 30 days of prorogation and exclusivity yes or exclusivity no. I'm creating issue to our company if I don't prorogate the exclusivity. I don't think so.
I don't think that no one of my shareholder will complain about the fact that they didn't give 30 days of exclusivity to Cassa Depositi e Prestiti. The deal with Cassa Depositi e Prestiti, in our view, as a matter of mathematics, continue to be the best choice in terms of industrial synergies. In the meantime, having no exclusivity in these 30 days, I agree with you, it's impossible that they sign any kind of agreement in 30 days. It leave us also the opportunity to understand if there are other interest, what could be the interest, the possible value, so on and so forth. We are not changing our mind and our plan. The main goal is to find an agreement at a value that could make sense for all my shareholders with Cassa Depositi e Prestiti.
We have the prorogation till the 30 of November, and the non-exclusivity is not an issue or a change of our approach in this kind of negotiation. When we talk about towers, two things. The first one, are you happy with the MSA? I'm not happy with any contract that we have in our company, but not because of that. We have a lot of challenges and as I talk every day to my team, we have to wake up in the morning thinking if we did the right thing the night before. This is the only way to improve our number. I think that with this culture, we are showing that we are on the right path to improve our number.
If you want to discuss about strategic view, TIM, but also a lot of other players perhaps didn't do the right choice several years ago. If we had the towers till today, you know what I should have done? What we are doing now, layering. The tower business is something that is different from the retail. I cannot at the same time put one person to manage an infrastructure business, a retail business, a wholesale business, and all these kind of things. This is one of the reasons for which we move towards our plan of layering, a completely different business model. Again, we weren't the only ones to do that. More or less, all the telcos do that. About the MSA, we have to sit every year to discuss with INWIT that today is also a partner.
We don't have any kind of litigation. They are always open to discuss with us what they can do to improve our number, and this is the way with which we proceed. I hope that I was enough clear with you.
Thank you very much. Appreciate it.
Next question comes from Mr. Sam McHugh of BNP. Mr. McHugh, please.
Yeah. Morning, everyone. Just two questions, please. First of all, on that enterprise business, I think you talked about 9% service revenue growth year-to-date. I wonder if you could just unpick that growth between how much is coming from acquisitions, how much is coming from kind of energy pass-through you mentioned, and then how much of it is internal revenue, so just charges to other parts of the group. Secondly, on energy.
Sam, sorry again. We are getting some issue. Can you repeat please, because we were unable to understand. Sorry.
Yeah. Actually, I'll stay where I was probably.
Sam, we will try to repeat what we understood because, sorry, the line was very bad. You ask more details about on energy. Try to understand which is the value at which we are buying energy and we are forecasting to buy energy for 2023. Some more detail about the so-called pass-through towards the other player that is not an M&A. And then some more details about our trend on the revenues of TIM Enterprise, where there is no M&A. Is this the question? Sorry.
Yeah, it's pretty much the revenues for TIM Enterprise. How much is energy pass-through? How much is M&A? Yeah, I think you got it.
Okay. I leave Adrian to talk about the energy, but it is important, I think, that you ask the right question. We've heard calls from other players that say that they have hedged much more than us, but it's not a matter of how much did you hedge. The real main issue is at which price. For example, when we talk about 75%, 50% of the 75% is at a value that is close to EUR 120, EUR 110 . A real low price. Then there is a question to the 15%, which is a pass-through towards the other player, because it's important to remember that the collocation towards the other OLO, other licensed operator, and the consumption of energy of this part is something that has no impact on our EBITDA, because it's completely pass-through.
Again, Adrian, I don't know if.
No, I think that's pretty much it. In order to understand 2023 and what happened in 2022, the main thing is that these hedge positions were closed before the war started. It was at the previous prices for energy of December, January, and February, as Pietro was mentioning. It's not the intention to be fully hedged. The intention is to cover in terms of prices. This is the situation for the 50% of hedge for next year in terms of energy cost. We've done an additional 10%-12% of hedging these past weeks where prices were going down.
We have 15% of the energy consumption, which is the pass-through for the other operators in terms of co-location. That is kind of a natural hedge for this position. You know, what we are working on is in terms of being conscious of the cost of 2023. We will give much more information. We will present the plan, but definitely it's something that is under management.
Sam, I believe this switch to Elio to give some more color about the trend of the revenues. It's important to start to think that the business model of TIM Enterprise is completely different from the business model of the consumer. Now we'll ask Elio to give you an idea about what we have already signed in terms of contract that will guarantee us a trend of revenues. Because this is something that we control in a maniacal way because it's the most important element of TIM Enterprise. The mix of the revenue and the control of the cost of each line of revenues is one of the main target that I gave to Elio. Elio, please.
Thank you, Pietro. Good morning. Thanks for the question. Just to make a quick recap of revenues. We are steadily growing revenues quarter-over-quarter when comparing to last year. I give you just a quick snapshot on the main numbers. In quarter one, we did EUR 667 million versus EUR 625 million. In quarter two, EUR 702 million versus EUR 670 million. In quarter three, EUR 681 million versus EUR 654 million. Now, when you put together the nine months, revenues are growing mainly by services, where the difference between 2022 and 2021 is EUR 137 million, only by services. Mainly driven by cloud and cybersecurity, where we are accelerating most of the business. There is no M&A.
This is an organic growth because we are concentrating all the efforts and all the energies on switching customers to cloud, as Pietro mentioned before. On the energy, for what it may concern Enterprise, we registered only the incremental cost of EUR 50 million year to date, and it is mainly driven by gas, in connection to the users of data centers. Hope that picture looks clear.
Just to clarify another point. In this number of TIM Enterprise, we consolidated all the different companies, so Noovle, Olivetti, Telsy, so on and so forth. This is a trend that is towards all the market. Compared to some number in the past, when we are looking at Noovle on a standalone basis, where the revenues of Noovle were composed from a component towards the external market, as something toward the captive market. Here, all the captive markets doesn't exist anymore because there is a consolidation. It's all growth outside the company. I hope that we answered to Sam, and I want to come back just to.
Fine, fine yeah . Please go on.
Thank you, Sam. I want to come back just for a second to the question of David, because I understood better from my colleagues the question related to the contract. What's up is that once we sign a contract in December, CPI linked, we have to wait one year, and after the one year, we can adjust based on the inflation. We cannot change the day after. Why we want to do everything by the end of 2022, because the reference point is also the inflation that we had during 2022, and we reduce the impact because the inflation will go down. While on the customer base, we will recover the inflation through the price up. The further question could be, so you will leave only a marginal part of the customer base in this way.
It's important to remember that we have also a lot of customer in our customer base that usually buy also new services. What we'll do, every time we sell a new service on the customer base, we'll explore the opportunity to change the clauses without give them the possibility to cancel the existing contract. I hope that now it's more clear. If not, David, we can meet in Barcelona, and I'll be able to give more colors.
Next question comes from Mr. James Ratzer of New Street Research. Mr. Ratzer, please.
Yeah, thank you very much, indeed. Good morning. I've just a few questions, please. The first one, Pietro, could you please give us an update, if there is one to be given on the Enterprise sales? We've got a few stories in the press around that, so just love to hear the latest on that situation. Secondly, I think EBITDA consensus for this year for domestic EBITDA is EUR 3.54 billion. That would imply fourth quarter EBITDA of only EUR 700 million. I mean, is that too low? I mean, that would imply almost 17% decline in the fourth quarter, yet I think you were mentioning the clean underlying decline in the third quarter was only about 9% when you adjust for some of the employee accounting. Does that not look a little bit conservative at the moment?
Finally, just love to go back to the fixed trends around ARPU, because although you talk about value over volume, it does look as if I strip out the ICT business that your wireline fixed ARPU is still coming down around 10% year-on-year. There does seem to still be ongoing pricing pressure on the wireline side. It'd just be great to hear what's driving that and how that trend could evolve over the next few quarters. Thank you.
Thank you, James. About Enterprise, if you remember, the 7th of July, we talked about our delivery plan. We spoke about the important milestone to start to transform the internal business unit in a firm, in a company. This is what was approved by the board yesterday. That is for sure the first step of a further process, because we always mention that we want to keep the optionality to sell a minority stake. Remember, a minority stake because we strongly believe that TIM Enterprise is a real good business indeed.
Based also on the experience, we think that the eventual negotiation of the sale of a minority stake cannot be treated as, I use the word of Luigi Minerva, soap opera, or the word of Pietro Labriola, telenovela, and we have to disclose on the price or work on leaks. What we want to state is that we are working on our Capital Market Day plan that had clear milestone, the process to transform the different business unit in separate company and to be prepared to work to have the optionality to sell a minority stake of TIM Enterprise. Again, a minority one. This is what we are doing. Related to the second question, you asked me a lot, so I don't have to declare anything.
Due to the fact that we don't foresee any kind of issue in terms of business trend for the fourth quarter, your math is better than mine. You did the right calculation. Okay? This is what we told also in the last call to the market. We are optimistic and always, if I follow your math, it's quite possible that also 2023, 2024, if you do the calculation about our guidance and result of the 2022, could then come into. This is not a guidance. We will release our guidance in February to the market. You asked also a question about the cost of labor.
About the ARPU. It's clear that our strategy from volume to value had to work also on a timeline. Because, for example, now we release a new offer of 10 Gb at close to EUR 40, so no problem. About the calculation, we have to remember that and the thing that is something that I tried to explain also in the call of March 2022. In the past, our offer on the ultra broadband was made by two components, a kind of installation fee contribution and a monthly fee. This is something that doesn't appear on the bill of our customer. On the bill of our customer and on our cash flow, we have each customer EUR 29.90 per month.
The way in which was built the offer was a contribution up front that was close to EUR 80-EUR 100 . Sorry, EUR 200 and price per month of EUR 24. Due to the fact that we discontinued, in some way, this procedure, because we are reducing everything to an installation fee that is much lower, what is happening that this is impacting the trend of the ARPU. What will happen is that by math, starting from the third quarter 2023, when we start to have the end of the free software that was built in this way, you will start to see an increase of the ARPU by max. I'm always transparent because I don't want to give any kind of surprise to the market.
I'm telling to you already what you will experience in the third quarter 2023. I understand that it's not easy to explain this detail, and in any case we are more than open with our IR to give you the details and to show in some chart all these elements.
Okay. Yeah, great. Thanks very much. I will follow up . I mean, more you can disclose on that in future quarters, I think it would be helpful. Thank you.
Thank you.
Next question comes from Mr. Carl Murdock-Smith of Berenberg. Mr. Murdock-Smith, please.
Thank you. I just wanted to ask on restructuring costs. Over the first nine months, I think you've spent over half a billion euros on restructuring costs. Can you just provide a bit more detail on those and also some guidance in terms of at what level of restructuring costs should we expect going forward? Thank you.
I need Adrian to give some more detail. The main element is related to the cost of labor, because if you remember when we signed the agreement with the unions, we strongly push an acceleration about early retirement of five or seven years. The number that you see are not cash item. Again, it tells us, and this is the amount of money that we are putting in the plan to facilitate the process of early retirement of our colleagues for the next years. Adrian.
That's pretty much it. It's the cost of the restructuring for the exits of this year and next year. It's basically a non-cash item, cash item, and this will allow us to reduce in the future 40% the cost of these exits. This is agreement that we signed in August. That was very positive even in this context. It's similar to what we did in last year, but in this case with probably a higher return.
Great. Thank you.
That was our last question. The conference is now over. Thank you for calling.