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Telecom Italia shifts fixed line assets

by on07 February 2018

Keeping the French out of the backbone

Telecom Italia plans to confer all of its fixed line network assets into a separate company which will be fully controlled by the group.

Chief Executive Amos Genish said the phone group will discuss the new plan at the next company board meeting, scheduled for March 6.

“We presented a hypothesis of legal separation of the network, with a dedicated company, and we expect to discuss it at the next board”, Genish said after meeting the Italian government and the industry regulator.

Genish added that the company “at this stage” would be fully controlled by Tim, and its governance would allow parity of access to sector operators.

The move is likely to get government backing. In fact Economic Development Minister Carlo Calenda even suggested it last month.

“My opinion is very clear, I think that we should have two legal entities, separated, on the market. I think that they are considering this. They are studying the various possibilities and opportunities.”

Calenda, whose ministry oversees the telecoms sector, said he was also in talks with Telecom Italia “to define the perimeter of the network, which is not easy at all”. He said progress was being made as the company is working with telecommunications authority AGCOM on the spinoff. “It is a very important operation and will take time to complete.”

The company may split in order to address government concerns over foreign ownership of the network, an asset valued at about 15 billion euro ($18 billion) that Italy considers strategic. French media conglomerate Vivendi SA, Telecom Italia’s largest shareholder with a 24 percent stake, increased its influence over the Italian phone company last year.

Vivendi’s strategy led the Italian government to invoke so-called “golden power” authority to curb the French company’s influence. In September, an Italian government panel determined that the phone carrier should have informed the prime minister earlier of Vivendi’s increased role. As a result, Telecom Italia risks a fine of about one percent of Telecom Italia and Vivendi’s combined sales, which would amount to about 300 million euro.

Calenda said he needs to understand whether a fine imposed on Telecom Italia under golden power legislation can be reduced.

“The problem is related to the amount of the fine that we, according with the law, should give to them because it is really very important, it is one percent of the turnover”, Calenda said.



Last modified on 07 February 2018
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