Telecom Italia has dismissed a local newspaper report claiming it plans to set up a new fixed-line venture with state lender Cassa Depositi & Prestiti (CDP) as “groundless”.
A spokesperson for the Italian incumbent denied the company has intentions…
Telecom Italia has dismissed a local newspaper report claiming it plans to set up a new fixed-line venture with state lender Cassa Depositi & Prestiti (CDP) as “groundless”.
A spokesperson for the Italian incumbent denied the company has intentions to spin-off its fixed-line network – which has been valued at €12bn to €15bn – into an operation with the state lender, as recently reported in Il Sole 24 Ore. The Italian paper stated CDP could invest €3bn in the new venture, which may also include Metroweb, the company spearheading a €4.5bn project designed to bring fibre optic to 30 Italian cities by 2017. CDP has agreed to inject up to €500m in the project.
Despite the denial, shares in Telecom Italia rose 7% during the day.
Telecom Italia executive chairman and CEO Franco Bernabe had told analysts in a conference call in early May that the company considers its fixed-line network a key asset and has no intention to lose control over it.
However, Bernabe said at the time the company is open to exploring options for the network, adding that structurally separating its Open Access network has afforded it regulatory benefits.
TelecomFinance understands Telecom Italia is still considering the structural separation of its fixed-line network and is open to collaborating with other investors.
In a recent report, BernsteinReseach analysts said they believe structural separation is a likely outcome.
“Because a Metroweb build without collaboration from Telecom Italia could result in a decline of some 15% of Telecom Italia domestic EBITDA over the next three years, we think that there is more pressure than ever on Telecom Italia to consider some sort of partnership with the Metroweb build and/or to separate entirely its wireline infrastructure,” they said.
In their view, the latter option would be the best outcome for both the company’s shareholders and the state.
