Barely a week goes by without some new development in the current happenings at Telecom Italia. This one is proving to be no exception as the operator keeps all options open before going public with a final decision about its future strategy.Latest reports are now saying the Italian group and state lender CDP are expected to start formal negotiations over a potential merger of TIM's network assets with those of state-backed Open Fiber.Citing unidentified sources, Reuters said the pair is expected to sign a confidentiality agreement (NDA) in early April. The move is likely to put more distance between TIM and US investor KKR, which has been waiting for the operator to make a decision on its €10.8 billion (US$11.9 billion) bid since November 2021.Figure 1:And on and on: Reuters reports that TIM is to start negotiations with state lender CDP on a possible Open Fiber merger.

(Source: Arcansel/Alamy Stock Photo)TIM is already reported to have been in negotiations with CDP on a possible merger with Open Fiber – reviving a long-standing plan to create a single fiber network company in Italy. CDP owns a 9.1% stake in TIM and 60% of Open Fiber.At the same time, the operator has confirmed that discussions with KKR on "the attractiveness, actuality and deliverability" of the US investor's offer are ongoing.Splitting the oddsMeanwhile, TIM has also received a "non-binding proposal" from UK-based CVC Capital Partners for a minority stake in a unit that doesn't yet exist in a standalone form. CVC is interested in investing in a new services unit that would emerge once the operator has completed a revamp proposed by new CEO Pietro Labriola.The CEO's plan is to hive off the group's Italian fixed network and separate the operator into two units.As previously outlined by TIM, a unit called "NetCo" would incorporate the operator's fixed network assets as well as the domestic wholesale and Sparkle's international businesses. "ServCo," meanwhile, would hold the enterprise services division as well as Noovle, Olivetti, Telsy and Trust Technologies.Want to know more? Sign up to get our dedicated newsletters direct to your inbox.KKR also reportedly wants to discuss the implications of an Open Fiber merger. Indeed, KKR's plan for TIM is said to be similar to that presented by Labriola, in that both propose separating infrastructure assets from services operations.However, Labriola is said to be convinced that implementing the revamp internally could generate more value for investors.Meanwhile, Reuters quoted a top government adviser as saying that Rome's goal remained that of creating a single broadband network in Italy, which could be achieved by merging TIM's fixed assets with those of Open Fiber.Related posts:TIM's enterprise unit attracts investor interestTIM starts formal talks with KKRTelecom Italia plans to do the splits— Anne Morris, contributing editor, special to Light Reading