Telecom Italia’s board of directors has approved a plan to spin off the fixed-line network into a private company.
The Italian incumbent issued a statement after today’s board meeting saying the new company will own the assets and resources for…
Telecom Italia’s board of directors has approved a plan to spin off the fixed-line network into a private company.
The Italian incumbent issued a statement after today’s board meeting saying the new company will 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 wants to spin off its network to help cut its debt that stood at €28.76bn on 31 March. The company aims to reduce this to €27bn by the end of the year.
“The new structure will guarantee all operators [Telecom Italia and other licensed operators] access to the fixed-line network in application of the European-denominated ‘equivalence of input’ model of equality of treatment,” the company said.
The new company will also offer other operators services such as unbundling.
Milan-based Telecom Italia said it will immediately inform the Communications Regulatory Authority about the plan, noting that the regulator will assess its effects on the current regulatory framework.
The telco said it will also continue talks with state-controlled Cassa Depositi e Prestiti about its potential acquisition of a stake in the new company.
During a conference call with analysts earlier this month, TI CEO Franco Bernabe said that, whatever the board’s final decision on the spinoff is, the company will retain control of the network.
He also stressed that it will take a “long time” to implement the spinoff. “It’s not simply an organisational deal. It would be a transformative deal for the Italian market,” he said.
TI is also looking into the feasibility of a mobile tie-up with Hong Kong-based Hutchison Whampoa’s 3 Italia.
The market has speculated that a fixed-line network spinoff agreement would make a deal with Hutchison more palatable to authorities.