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Italtel Set for IPO, at Last

Light Reading
News Analysis
Light Reading
7/22/2004

Four years later than originally planned, Italian VOIP systems provider and integrator Italtel SpA, which is partially owned by Cisco Systems Inc. (Nasdaq: CSCO), is set to list its shares on the Milan stock exchange.

The vendor (company motto: "We network, you play.") plans to use the cash it raises for further expansion in Europe. It is already the dominant provider of VOIP systems in Italy, having worked closely with Telecom Italia SpA (NYSE: TI), another of its current investors, in its Class 4 switch replacement program, and with triple-play pioneer eBiscom SpA (a.k.a. FastWeb). (See Telecom Italia Uses More VOIP, Telecom Italia Takes the IP-ian Way, and FastWeb Boosts VOIP With Hughes.)

Now it wants to build on its initial cross-border contract success in France and Germany by capitalizing on the VOIP migration plans of other major European carriers (see Cegetel Picks Italtel for VOIP Over DSL, LDcom Picks Italtel Softswitch, and Italtel, Cisco Win VOIP Contract).

It also plans to expand its presence in Latin America, where it has recorded some success largely through its business and technical partnership with Cisco (see AFC Bags One in Bogotá and Cisco Wins in Chile, Italy).

The vendor, which posted revenues of €591.8 million (US$726.4 million) in 2003, isn't saying how much it hopes to raise or when it will list its shares (see Italtel Reports 2003 Results). But various reports from Italy suggest a listing of about 30 percent of the stock in October with a view to raising about €400 million ($491 million).

Italtel had not responded to calls and emails requesting further details as this article was published.

The original plans for an IPO were made in 2000, when Telecom Italia sold its majority stake to a group of investors (see Cisco et al Invest 1B Euro in Italtel). The major owner currently is Clayton Dubilier & Rice Inc., which holds 48.77 percent, while Telecom Italia still owns 19.37 percent and Cisco 18.4 percent. The other owners are Advent International Corp., with 8.65 percent; Italtel's staff, 2.65 percent; and Brera Capital Partners LLC.

While waiting for the market to recover and for VOIP to become more mainstream, Italtel and Cisco have worked closely together on product development and network implementations, and the pair even have a joint Website: Italtel-Cisco (see Cisco to Design Italian Network and Italtel Tops Cisco Survey).

But that hasn't stopped Italtel teaming up with other vendors, particularly for work in its home country (see Marconi Wins at Telecom Italia and Acme Packet Teams With Italtel).

Italtel joins a number of other European telecom players that have decided to take advantage of a slight return to confidence in the telecom sector this year by raising funds from the public markets (see Session Controller IPO Scores Success, Mixed Fortunes for Euro IPOs, Italians Join the IPO Flurry, and Investors Go Mad for Free Shares).

— Ray Le Maistre, International News Editor, Light Reading


For more info on the state of industry financials, check out the coming Light Reading Live! event:

  • Light Reading's Telecom Investment Conference, in New York City, November 10.

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