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Optical/IP

Au Revoir, Alice?

10:00 AM -- Telecom Italia (TIM) may bid adieu to Alice in France, according to reports. The operator has hired investment bank Calyon to review options for the sale of its unprofitable French broadband unit. A Telecom Italia spokeswoman would not comment on the reports. Back in November, former Telecom Italia chief executive Riccardo Ruggiero said in a conference call with analysts that the operator had considered exiting the French market, and now it looks as though the operator's new management is mulling a sale. (See Telecom Italia's CEO, Chairman Quit, Telecom Italia Execs Resign, New Italian Cheeses, Telecom Italia Confirms New CEO, and Telefónica Gets Green Light for TI Stake.)

Alice France is the fourth broadband provider in the country behind Orange (NYSE: FTE), Neuf Cegetel Group (Euronext: NEUF), and Iliad (Euronext: ILD). Alice France reported 882,000 subscribers at the end of September 2007, which is a market share of 7 percent. (See Neuf Makes Acquisitions Count, Telecom Italia Outlines French Plan, and Italians Prep Big French DSL Rollout.)

According to an industry source, Telecom Italia prefers to invest in its other European markets -- Italy, Germany, and the Netherlands -- and in Latin America.

So, who will buy Alice? Neuf is being taken over by SFR , so it may not be in the best position to consider an acquisition. Perhaps Iliad is in a buying mood. (See SFR, Neuf Talk M&A and SFR to Swallow Neuf in $6.4B Deal.)

— Michelle Donegan, European Editor, Light Reading

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