TIM Turns to Energy to Fuel Revenue Growth

I’m often asked how telecom operators can boost spending among consumers by offering services beyond connectivity.

It’s a dilemma: moving into new areas offers fresh revenue opportunities amid a seemingly perennial struggle for growth. And with millions of customers, there’s a large segment to cross-sell into. But the industry also has a dubious track record. AT&T’s push into content and Orange’s foray into banking were two ventures that failed spectacularly.

I was interested then to read about TIM’s recent advances into the retail energy market. In partnership with Poste Italiane, which is now its biggest shareholder, the operator is selling gas and electricity in about 800 stores. It’s presenting the service as TIM Energia Luce e Gas powered by Poste Italiane.

It’s a move that builds on the launch of TIM Energia, a service for business customers, back in February 2025.

Selling energy isn’t unchartered territory for telecom operators. A decade ago, I recall Orange offering electricity to households and small businesses in Poland. More recently, Spain’s MasMovil, which later merged with Orange to form MasOrange, took a controlling stake in Energia Colectiva, a provider of gas and electricity under the Lucera brand.

Earlier this month, MasOrange sold the business, which has about 350,000 customers, to Spanish electric utility company Endesa, for €90 million. However, it will remain in the energy market through a cross-selling arrangement that will see both firms offer each other’s products.

One of the main challenges with introducing a new type of service is that it’s a hassle for customers to switch from their existing supplier. The more services they take, the more complicated the package becomes and the harder it is to align the various elements.

Another hurdle is that the telecom brand usually has little or no association with the new market it’s entering. This can make it difficult for customers to justify switching. Building a reputation can take many years and significant investment.

To gain traction, operators need to offer a clear incentive to encourage people to join. TIM is doing this by giving discounts to people taking its bundles of energy, broadband, TV and mobile services. Existing customers, for example, can save €65 a year by taking electricity and €130 a year by taking gas and electricity.

TIM says its electricity offering includes a “tailor-made instalment” payment option, based on each customer’s previous year’s consumption. Prices are set per kWh and frozen for 12 months to help household budgeting by offering protection from market fluctuations. In contrast, the gas offer automatically adjusts based on price variances in the Italian gas market.

The move into energy forms part of TIM’s broader Customer Platform strategy, which aims to boost customer spending by integrating new services into its fixed-line and mobile offers. Another example is an offer of free access to generative AI platform, Perplexity Pro, for one year.

Interestingly, CCS Insight’s consumer research suggests people could be willing to take energy from their telecom provider. When we asked Britons which services beyond connectivity they would consider buying, gas and electricity came out on top, at 24%, ahead of travel insurance (18%), home security (14%), financial services (11%) and cloud gaming (7%).

Selling gas and electricity bears some resemblance to selling connectivity as both are intangible, utility-type services. By making effective use of partnerships, mobile operators can minimize their upfront costs and limit risk. Energy is also a straightforward product to sell as it’s well-known to consumers and easy to package.

TIM’s move therefore feels logical, but as ever, the proof will be in whether it drives higher customer spending and enhanced loyalty. I’ll follow its progress with interest.