CPD may delay TIM bid until after Italy's election
It's not easy to keep up with the seemingly never-ending saga of the Italian government and Telecom Italia's (TIM) plan to spin off its fixed network assets and potentially merge them with rival Open Fiber to create a single network provider in Italy.
Only this week, reports said Italian state lender Cassa Depositi e Prestiti (CDP), which controls Open Fiber, is preparing to make a non-binding bid for TIM's fixed grid this month, before the country's general election on September 25.
Italian media and Bloomberg are now reporting that CDP is leaning towards postponing its offer until after the elections have taken place. Sources told Bloomberg that political uncertainty surrounding the vote suggests that a delay is appropriate.
Light Reading has already reported how the breakup of TIM and subsequent merger could face new hurdles amid the country's latest political upheaval.
The right-wing Brothers of Italy party, leading in polls ahead of the election, reportedly wants talks to be suspended until a new government is in place. The party has said it is "totally opposed to CDP-TIM's current plan" and is thought to be in favor of TIM being re-nationalized.
At the same time, TIM's largest shareholder Vivendi is understood to be unhappy with CDP's €20 billion (US$19.9 billion) valuation of the fixed network business and is seeking a valuation of at least €31 billion ($30.7 billion).
Here are some of the key developments with the TIM plan to date:
TIM has been in talks with CDP since April on combining its fixed assets with those of Open Fiber.
In May, the operator signed a non-binding memorandum of understanding (MoU) with CDP Equity as well as US investor KKR and Macquarie Asset Management. The aim of the MoU was to start a process that would ultimately lead to the creation of a single fiber network operator, controlled by CDP Equity and also involving KKR and Macquarie. CDP owns 60% of Open Fiber and about 10% of TIM.
In July, TIM CEO Pietro Labriola finally confirmed the intention to separate TIM's fixed-line network infrastructure (NetCo) from the parts of the company that sell services and deal with customers (ServiceCo).
In the same month, Italy's coalition government imploded, leading to the resignation of Prime Minister Mario Draghi and the calling of a snap election on September 25.
Former Vodafone CEO Vittorio Colao, who currently holds the post of Minister for Innovation and Digital Transformation in Italy, recently reiterated that the current government is keen on a national telecoms infrastructure "ensuring great performance and quality."
However, while he noted that this could be achieved by combining parts of Telecom Italia with Open Fiber, he indicated this would only be welcome if "competition is preserved."
- Ex-Vodafone boss Colao backs Italy’s single network, with caveat
- TIM soldiers on amid political turmoil
— Anne Morris, contributing editor, special to Light Reading