Telecom Italia CEO says single network plan still key for new government
Reuters
Published Nov 17, 2022 12:54
Updated Nov 17, 2022 14:38
By Elvira Pollina
MILAN (Reuters) -A project to create a single unified broadband network is still crucial for Italy's new right-wing government, although discussions are underway on how to reach such a goal, the head of Telecom Italia (BIT:TLIT) (TIM) said on Thursday.
The new right-wing administration is reviewing options for debt-laden TIM and an outstanding proposal to combine the former phone monopoly's fixed network assets with those of state-backed Open Fiber.
TIM has been in talks since May over a multi-billion euro sale of its prized landline grid to state lender CDP, which is keen to combine it with that of its broadband unit Open Fiber to create a unified wholesale-only operator under its control.
Such a plan has been criticised by cabinet undersecretary Alessio Butti, who called on CDP to take over TIM to favour a merger of its network with those of Open Fiber.
"I don't see anyone...in the new government contradicting the assumption that the single network is key," Pietro Labriola said during an online event.
"There are discussions underway on how to reach the goal...the route can be different, but the end game is the same," he added.
The sale of the landline grid is a key plank of Labriola's plan to turn around TIM, shares of which are trading close to record lows, by splitting the company into several units and cutting its 25 billion euro ($25.8 billion) debt pile.
Under pressure for years in a competitive domestic market, TIM has extended until the end of this month a deadline to receive a non-binding bid from CDP, which also holds a 10% stake in TIM.
Negotiations have been complicated by valuation issues with TIM's top investor Vivendi (EPA:VIV) seeking 31 billion euros to back the sale, more than 10 billion euros above CDP's valuation, sources have said.
Labriola said it was not up to him to say whether a takeover of TIM was the best route to pursue the single network project.
"In case someone intends to launch a takeover bid, they need to make a formal announcement and then it is up to shareholders to evaluate it," the executive said.
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Written By: Reuters
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