Telecom Italia (TI) is preparing for a public listing of its newly-created domestic tower unit Inwit as it gets started on a new three-year strategic plan.
The board of directors has endorsed the transfer of about 11,500 towers to Inwit, the Italian…
Telecom Italia (TI) is preparing for a public listing of its newly-created domestic tower unit Inwit as it gets started on a new three-year strategic plan.
The board of directors has endorsed the transfer of about 11,500 towers to Inwit, the Italian incumbent said in a statement outlining its strategic plan for 2015-2017, approved at a meeting yesterday.
The telco intends to maintain a majority stake in Inwit after the IPO.
TI CEO Marco Patuano was quoted during a press conference held after the new strategic plan was unveiled as saying he expects the listing to take place before the summer.
TelecomFinance understands that TI has mandated Deutsche Bank and Banca IMI to advise on the float of the towers, estimated to be worth about €1bn.
In recent months, Italian towerco EI Towers and infrastructure fund F2i along with Spain’s Abertis and American Tower have all been rumoured as potential bidders.
€14bn earmarked for investments in Italy and Brazil
The new strategic plan will see TI step up its investment programmes in Italy and Brazil, where it controls the second-largest mobile operator TIM Brasil.
The telco aims to invest €14bn in the two markets over the three years – €10bn in Italy and €4bn in Brazil, according to the statement.
Of the €10bn to be spent in Italy, €2.9bn will be used to develop its optic fibre for broadband – €1.bn more than stated in the previous plan. The telco aims to extend optic fibre to 75% of the population by the end of 2017.
About €900m will be spent on mobile broadband, with TI aiming to extend its 4G network to 95% of the population within the three years.
The remaining investments in Italy will go on new data centres, international fibre connections, and improvements to infrastructure.
In Brazil, TI said the planned investments will enable its local unit to extend 4G coverage to 15,000 sites and 3G coverage to 14,000 sites by the end of 2017.
“The aim of this acceleration of investments is to create the foundations for growth in turnover based increasingly on the spread of innovative services with digital content,” the company said.
TI expects the new plan will also result in savings of about €1bn over the three years due to cost efficiencies.
The telco reported consolidated revenues for 2014 of €21.57bn, down 5.4% year-on-year. EBITDA totalled €8.7bn, down 6.8% on the 2013 result. Meanwhile, adjusted net debt stood at €26.65bn – €156m less than at the end of 2013.
The new strategic plan will see TI aim to reduce its current net debt to EBITDA ratio of 3x to 2.5x by the end of 2017.
Meanwhile, late yesterday, the telco announced that it will launch an offer to buy out minority shareholders in its TV broadcasting unit TI Media. TI currently has a 77.1% stake in the unit and purchasing the remaining shares is expected to cost it about €25m. TI Media’s sole asset is a stake in digital broadcasting firm Persidera. The incumbent expects this transaction will close by the end of the third quarter.
Metroweb buy shelved
Speaking at the press conference, TI chairman Giuseppe Recchi reportedly said the board has decided conditions are not right to buy a stake in local fibre network provider Metroweb, although it remains interested in the asset. The board would welcome future opportunities to create sydnergies with Metroweb, he reportedly said.
TI had previously said it was looking to acquire a stake in Metroweb as part of plans to upgrade its broadband network.
