HomeAccessTIM and CDP agree plan for long awaited single network

    TIM and CDP agree plan for long awaited single network


    La Pazienza È la Virtù dei Forti

    Telecom Italia (TIM) and national investment bank Cassa Depositi e Prestiti (CDP) are close to an agreement to merge the phone group’s fixed network assets with those of state-backed rival broadband firm Open Fiber, Reuters three sources said last night. The pact would create the single broadband network that TIM CEO Pietro Labriola has tried to mastermind since being mooted a chief executive by the board. Labriola’s turnaround plan was built on splitting the group’s landline grid from service operations.

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    The boards of directors of TIM and CDP met to approve a framework agreement and negotiate a binding deal on a network tie-up with Open Fiber with a deadline for completion of October, a Reuters source said. The agreement would see CDP control the combined network. It is TIM’s second largest investor with a 10% stake and holds a 60% stake in Open Fiber. Italy is keen to create a single broadband network champion and to expedite the fibre optic roll-out that could digitalise the economy. 

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    Debt-laden TIM plans to hive off its landline grid, an asset that analysts value at €20 billion at most. As the final structure of the deal with Open Fiber is not yet decided, there are options under discussion including an outright sale of TIM’s landline grid, two separate sources told Reuters.

    The framework agreement has the backing of infrastructure funds Macquarie and KKR, which hold minority stakes in Open Fiber and in the TIM network respectively. KKR, which spent €1.8 billion on a 37.5% stake in TIM’s last mile network unit FiberCop and attempted a €10.8 billion takeover bid for TIM, has cast doubt on how these plans fit the regulation and valuation issues related to the single network plan.