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Telecom Italia Bids for AOL Units

Ray Le Maistre
6/27/2006

Telecom Italia (TIM) has made an initial offer for the French and German ISP assets of AOL Inc. (NYSE: AOL), a spokesman for the European carrier confirmed today.

"We have made a non-binding offer, which is one of the first steps. Now we will see what will happen," says the spokesman, adding that no financial details are available.

Industry analyst have valued the assets, which together have about 3.6 million customers, including 1 million broadband users in Germany and about 500,000 DSL subscribers in France, at about €700 million (US$880 million).

The Italian carrier's offer doesn't include AOL (UK) Ltd. , which is also believed to be up for sale. (See AOL Mulls Euro Broadband Exit.)

Telecom Italia has instead focused on the French and German markets, where it already has broadband operations. It acquired Hansenet in Germany in 2003 and recently launched its IPTV service there, while in France it bought Liberty Surf. (See Italians Invade Germany, DT Rival Launches IPTV , Eurobites: Incumbents Splash Their Cash, and Italians Prep Big French DSL Rollout.)

Other service providers linked to possible bids for AOL's continental businesses include Deutsche Telekom AG (NYSE: DT), French alternative operators Neuf Cegetel Group (Euronext: NEUF) and Iliad (Euronext: ILD), Germany's Freenet AG , and Dutch carrier Versatel Telecom International N.V. (Pink Sheets: VRSAF).

— Ray Le Maistre, International News Editor, Light Reading

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