Telecom Italia to Get Lighter Rules for Full Network Spinoff
Telecom Italia SpA (TIT) should consider giving up control of the fixed-line network it’s planning to spin off in order to win regulatory concessions, according to the president of Italy’s communications authority.
“The broader and deeper Telecom Italia’s separation is, the more significant will be the regulatory benefits,” Angelo Cardani said today at Agcom’s annual meeting in Rome. Cardani, who regulates Italy’s 61 billion-euro ($77 billion) communications industry, said Italy’s biggest carrier should “move toward giving up control” of the new unit, calling Telecom Italia’s spinoff proposal “innovative.”
Telecom Italia has argued that lighter regulations are crucial for the spinoff, a move that could raise funds for repaying debt and set a precedent for Europe’s indebted carriers. Company directors on May 30 approved the plan to separate the grid. The assets are valued at about 14 billion euros, a person familiar with the matter said in May.
The former phone monopoly should include in the separation plan not only passive assets such as unlit fiber and copper lines but also active components, Cardani said. Such assets include so-called digital-subscriber-line access multiplexers.
Telecom Italia Chief Executive Officer Franco Bernabe, who attended the meeting today, said the carrier isn’t “seeking discounts on the spinoff plan but only an adequate regulatory dividend because our project is highly competitive.”
The shares rose 3.3 percent to 53.7 cents at 2:19 p.m. in Milan. The stock is down 21 percent this year, valuing Telecom Italia at 9.8 billion euros. The carrier said last week it had ended talks with Hutchison Whampoa Ltd. (13) to combine their wireless assets in Italy.
While phone companies have tried separating fixed-line businesses before, fully carving out an access network -- considered strategic by many governments -- would be unseen among European carriers.
A separation of the fixed-line grid, ensuring rivals access to Telecom Italia’s transmission network, also “may be an opportunity to develop Italy’s ultra-broadband services,” Cardani said.
Telecom Italia has said that it could sell a stake in the separated company to state lender Cassa Depositi e Prestiti.
To contact the reporter on this story: Daniele Lepido in Rome at email@example.com