Government has received €6.7 billion from the EU’s recovery fund to speed build out of broadband and upgrade to fibre
The stance on TIM’s fixed line business from the French media group seems to have changed as TIM’s investors are being asked to evaluate the €10.8 billion ($12.2 billion) plan presented by US private equity operator KKR to gain control of TIM, which values the operator at about €33 billion.
Until now, the French group has seemed reluctant to conceded any control over TIM’s fixed network and there have been months of wrangling about who should control the proposed single national fibre infrastructure.
An outside infrastructure fund gaining control of the national flagship telco has alarmed many in Italy. Unions are reportedly concerned about the future of TIM’s 42,500 employees and have told the company they will not accept any reorganisation that puts jobs at risk.
It’s good for network so it’s good for shares
A spokesperson for the French media group told Reuters that Vivendi was interested in any agreement that improved the efficiency and modernity of the network, as long as it was “preserving the value of its investment”.
“In this perspective, the hypothesis of a state control of the network, if it could lead to an institutionally guided strategic project, will certainly be evaluated with openness,” the spokesperson added.
TIM’s fixed line business is the mainstay of Italy’s telecoms infrastructure and, as such, underpins the nation’s broadband rollout efforts.
The €6 billion backbone
Italy has been granted €6.7 billion by the European Union recovery fund to speed up its national broadband rollout. The Italian government is said to be anxious to upgrade TIM’s network to fibre as it is Italy’s main telecoms infrastructure. Its stance on the KKR proposal could be influenced by its own ambitions for a national network.
Prime Minister Mario Draghi has previously hailed KKR’s interest as good news for Italy.
Sources have claimed that KKR will carve out the network and give state investor CDP – TIM’s second-biggest shareholder with a 10% take – a leading role in overseeing the asset and apportioning out the grid, a prospect that Vivendi may now be more open to.