KKR paid €22 billion for its stake in the NetCo last year, has filed complaint against rival Open Fiber to the EC and remains under investigation by the EC itself
US investment firm KKR is to waive dividends from FiberCop, the NetCo it controls having won a long tussle and paid €22 billion to spin it out of former incumbent Telecom Italia last year. Italy’s Ministry of Finance and Abu Dhabi’s sovereign wealth fund, AdiaIt, are also shareholders.
FiberCop’s churn rate has accelerated, losing 364,000 lines in the first six months of 2025 – which is generally believed to be a steeper decline than forecast by KKR. At the time of the buyout, KKR apparently expected FiberCop to have 15 million fibre broadband subscribers by the end of this year but had 14.1 million at the end of June.
As FiberCop replaces copper connections, customers are not automatically connected to the new fibre infrastructure; they can move to a rival if they wish. The buyout by KKR was unpopular in Italy, although it had the support of the Meloni government.
The Financial Times [subscription needed] suggests, “KKR initially envisaged that FiberCop would begin paying out dividends from December last year, according to internal documents seen by the Financial Times.”
KKR told the FT that this is not the case and it has chosen to reinvest rather than pay out dividends, believing its ability to reward investors will be greater once it completes its fibre broadband infrastructure which is scheduled for 2027.
Indications of things to come
The new entity did not get off to an auspicious start: in February the FT reported that a draft business plan shared with investors FiberCop’s management forecast €2 billion less in earnings before interest, tax, depreciation and amortisation over five years than KKR’s business plan. This led to KKR sacking the then CEO of FiberCop, Luigi Ferraris, and curtailing the powers of non-KKR senior management.
In 2024, FiberCop’s earnings were €1.9 billion and €824 million in the first six months of this year.
Increasing tensions between KRR and government
In the meantime, the Italian government has been putting KKR under pressure to merge FiberCop with its smaller, state-controlled rival, Open Fiber; last week Reuters reported that FiberCop has filed a complaint with the European Commission alleging that Open Fiber has received state aid in breach of the European Union’s competition rules.
More specifically, the complaint accuses the government of altering competition in the ultra-broadband market. In April, FiberCop told the Italian government it is ready to take over the work assigned to Open Fiber to speed up a European Union-funded fibre network rollout plan.
According to Reuters at the time, “The request highlights the difficulties Italy faces in accelerating spending of EU COVID-19 recovery funds, with the latest government data showing it has invested roughly half of the money so far secured, below goals.
“FiberCop and its smaller rival Open Fiber were entrusted with cabling more than 3 million buildings across Italy by the end of June 2026 under a €3.4 billion ($3.72 billion) programme aimed at rolling out ultra-fast broadband networks.”
KKR itself is already the subject of a formal investigation by the Commission, launched in July, for possible breach of the duty to supply correct information in merger investigation of KKR/NetCo transaction. On 30 May 2024, the Commission unconditionally cleared KKR’s acquisition of its stake in the NetCo.
