Also in today's EMEA regional roundup: Cattaneo plans deeper cuts at Telecom Italia; Sky and friends come up with Openreach plan; Google facing €3 billion fine from EU.
Ronan Dunne, the CEO of Telefónica UK Ltd. (O2), is exploring a possible management buyout of the operator, according to a Daily Telegraph report. The news comes in the wake of last week's decision by the European Commission to block the proposed merger of O2 with Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY)'s Three UK on antitrust grounds. Dunne has apparently been approached by various private equity groups interested in the potential of such a deal, with investment bankers setting a price of £8.5 billion (US$12.2 billion) for the deal -- substantially less than the £10.25 billion ($14.7 billion) Hutchison was willing to pay. (See Eurobites: EU Vetoes O2/3 Combo, Telefónica Eyes Alternative Buyers for UK Biz – Report and Eurobites: Merger of O2 & 3 Is a Bad Idea, UK Tells EC.)
Telecom Italia (TIM) 's new CEO, Flavio Cattaneo, is planning some serious belt-tightening, reports Bloomberg, as first-quarter earnings fell 16% year-on-year to €1.71 billion ($1.93 billion). The company now plans to save €1.6 billion ($1.8 billion) by 2018, which represents a near-tripling of its original cost-cutting target. The savings will be divided equally between opex and capex, said Cattaneo. (See Telecom Italia Names Cattaneo as New CEO and Telecom Italia Not Ready to Transform, Admits Exec.)
A coalition of UK operators and trade bodies has issued a 10 Point Plan for a Better Openreach, in which it tries to persuade UK telecom regulator Ofcom that BT Group plc (NYSE: BT; London: BTA)'s network access unit should be established as a legally separate company with its own independence and be given the "tools" to do its job properly. BT rivals Sky , TalkTalk and Vodafone Group plc (NYSE: VOD) are the three operators putting their signatures to the plan, along with the Independent Networks Cooperative Assocation (INCA) and the Federation of Communication Services (FCS) . In February, Ofcom published its Strategic Review of Digital Communications, which, while stopping short of recommending that BT be separated from Openreach , did say that BT must open its ducts and poles to rivals in a more meaningful way. (See Eurobites: BT Avoids Openreach Split and Vodafone CEO: I Want a Piece of Openreach.)
Separately, Ofcom could see its powers boosted if legislation to be proposed on Wednesday in the Queen's Speech comes to fruition, reports the Financial Times (subscription required). Among other plans, the government is proposing that they make it harder for companies to appeal Ofcom's decisions. The regulator may also be handed responsibility for oversight of the BBC, if certain political factions get their way.
Google (Nasdaq: GOOG) could be facing a €3 billion ($3.4 billion) fine from the European Commission for abusing its dominance in the online search market, reports the Daily Telegraph. This would represent the largest such fine that the Commission has ever imposed. According to the report, an announcement is expected before the summer break.
— Paul Rainford, Assistant Editor, Europe, Light Reading