Let's start from the basics. I was discussing this with a friend this morning because everyone talks about a crisis, but then people might think it's like crying wolf. Today, and not only today, but in the last 5-6 years, the European telecommunications sector, and even more so the Italian one, has had an IRR lower than the cost of capital. Whether it's telecom or other sectors, you don't need to go back to university to understand that a sector where the IRR is lower than the cost of capital is a sector where there will be no investments. If telecommunications were a marginal sector and not a key element in the value chain, or to simplify even further, in the food chain necessary to drive the digitalization of our country and economy, I could say we might even let it, quote, die through a Darwinian natural selection process. There are sectors that in the past were born, grew, and died because technological evolution provided an advantage. In our case, no, the telecommunications sector is clearly essential for the development of digitalization and communications. But if we have an IRR lower than the cost of capital, we won't have investors financing our companies to build these infrastructures. What should we do?
The income statement of companies is quite simple; it is made up of revenues. When we talk about market consolidation and someone thinks that market consolidation leads to an increase in revenues, that is not necessarily true, also because no antitrust authority will ever allow an increase in ARPU or prices for customers, unless, to touch this part of revenues, one thinks of logic similar to that of electricity, i.e., automatic inflation recovery in contracts, whether they are fixed-line or mobile phone contracts. And this could be a first aspect. Revenues. I remind everyone, a friend of mine, having read my Instagram book on LinkedIn, sent me a chart that I need to retrieve, and I remind everyone that a mobile phone service in Italy, water, costs less than a pizza. Yet maybe you can do without a pizza a month, I'm not saying a day, but a pizza a month. You cannot do without mobile or fixed-line telephony.
Let's move on to costs. When we work on costs, a series of rules and regulations come into play. Let's give concrete examples. Today, telecommunications is the first or second sector after rail in terms of energy consumption. Unfortunately, unlike all other sectors that are in third, fourth, fifth place in energy consumption, we are not considered energy-intensive, so we don't have an incentive to reduce our energy cost. When all of you want more 5G antennas to provide new services, more 5G antennas mean more energy consumption. More energy consumption means more costs, but nobody wants to pay a little more for the service because the increase in 5G antennas in some cases improves the service, it can allow you to bring better quality service to tourist locations, but nobody will want to pay €1 more for the service. So on the cost side, I have to find spaces. Other spaces can be found in the enormous constraints.
If any of you has WhatsApp that doesn't work, I doubt any of you know the number of WhatsApp's call center to call and ask for clarification, but even for paid services like Netflix. You don't have a toll-free number to call where a human operator answers. For us, there is an obligation. If I'm not mistaken, until the end of 2024, we have the obligation to have operators, so colleagues who answer customer calls, 24/7, 365 days a year. And the cost of answering a single call is €3. And maybe a mobile phone service costs €7-8 per month. Sure. To quantify the impact, my cost for Team of having call center activities is about 200-210 million euros per year. If I consider my equity free cash flow on a steady-state basis, which is around 5-600 million, that means if I didn't have these costs and handled everything with artificial intelligence, I would increase my equity free cash flow by 30%. That, very likely, could translate into an increase in the company's market capitalization of 20-30%, and with that equity free cash flow, you'll more easily find investors to finance me. So, energy, call center costs, process automation.
Then if I also move to the capex side, investments, because EBITDA minus capex is a proxy for cash generation, and within capex, we have the worst electromagnetic limits in Europe. So, if I want to cover an area to provide the service, the same area, the same surface in France requires a smaller number of antennas. If I have a higher number of antennas, I have to spend much more in terms of investment to provide the same quality of service that is provided in France, Germany, England, and any other country. In other words, providing service in Italy costs much more than in other countries.
So, having analyzed the income statement, I need to find a way to touch the top line, perhaps with an automatic adjustment of tariffs to inflation, as happens for all other utilities. And on the OpEx side, work on the cost of energy and call center service costs. On the capex side, I should be able to work on all the issues related to electromagnetic frequencies. Another solution that can help both costs and investments is simply to allow market consolidation. Are we sure there is an economic sense in having four or five mobile phone networks? No. If instead of having four or five mobile networks, we had three, the sector's costs for managing the service provision would be significantly lower. If I could combine the frequencies of various operators, there would be an efficiency from a spectrum point of view such that 1 plus 1 doesn't make 2, for those who studied engineering, it doesn't make 2, it makes 3, because there is a spectral efficiency that leads to cost reduction.
Well, first of all, as I have had the opportunity to say several times, our company can only be happy to have found a reference shareholder that considers investment in our company as a strategic investment. That is, we need to find a way to think in the medium to long term; we can no longer think only quarter by quarter. A reference shareholder like Poste helps in that logic. I have always said and continue to reiterate, if we are saying that in the market we are too many and we need to try to go from 5 to 3 operators, it is clear that the possibilities for infrastructure partners, because I want to avoid any type of entertainment, we discussed earlier that we must avoid having four or five networks, so no, Wind and because, as my colleague said earlier, Vodafone has already started a consolidation of their networks. As infrastructure operators, we remain three: us, Wind, and Iliad. If you do a simple mathematical calculation of the possible combinations, the only combination that is not feasible for antitrust purposes is Team-Wind. Any other combination, Wind-Iliad or Team-Iliad, we would view positively because it leads to the reasoning made earlier, that is, avoiding having a plurality of networks and returning to market rationality. So each of the two options I see as extremely positive for the market, but it's not just an Italian issue; also in France they are talking about going from 4 to 3 operators. In the UK there has been this consolidation, it's discussed in Spain. In other words, multiplying the number of infrastructures has no economic sense. Certainly, I wouldn't double the A1 highway by building another A1 next to it if the number of cars that need to travel is always the same.
