The head of Italian telecoms regulator Agcom has spoken out in favour of Telecom Italia’s (TI’s) plan to spin off its fixed-line assets into a new company, saying the greater the control the incumbent telco relinquishes, the greater the regulatory…
The head of Italian telecoms regulator Agcom has spoken out in favour of Telecom Italia’s (TI’s) plan to spin off its fixed-line assets into a new company, saying the greater the control the incumbent telco relinquishes, the greater the regulatory benefits it will derive.
In a speech before parliament in Rome, Agcom president Angelo Marcello Cardani described the plan, approved by the TI board in late May, as courageous and innovative.
Cardani noted that a larger-scale spin-off, involving active elements of the network, with a “deeper” separation will result in more “significant” regulatory benefits.
TI announced in May that spinoff plan would see the new company own the assets and resources for managing and developing the passive access network (both copper and fibre) and the active components of the fibre network, reportedly valued at up to €14bn (US$18.16bn). TI has said the new structure would guarantee all licensed operators access to the fixed-line network in line with the equivalence of input model.
In his speech today, Cardani said the plan may represent an opportunity to boost investment in network development.
He noted that Agcom initiated talks with TI following its disclosure of the board’s approval of the plan in May and is conducting an assessment.
TI, which aims to reduce net debt to €27bn by the end of the year, hopes the spin-off will bring regulatory changes that enable it to compete better in the domestic market. At present, the incumbent abides by stricter rules than rivals as it owns the fixed-line network.
TI CEO France Bernabe has stressed that the plan will require major changes to telecoms regulations in Italy, describing it as “a transformative deal for the Italian market”.
Speaking at a parliament hearing in late June, Bernabe said he hoped Agcom would approve the plan either this year on in early 2014 to ensure “a timely start” to operations at the new company.
TI is still in talks with state-controlled lender Cassa Depositi e Prestiti (CGP) about it acquiring a stake in the new company.
Last week, TI decided not to proceed with a proposed tie-up with Hong Kong-based Hutchison Whampoa’s local mobile unit 3 Italia.
At the time of writing, TI’s ordinary shares were up 3.56% to €0.539.
