Telecom Italia has said it will only spin off its networks business if there is some kind of regulatory incentive, according to a report in Il Messaggero.
In an interview with the Italian newspaper, Telecom Italia (Rome, Italy) chairman Franco Bernabe said there would have to be advantages for the new company and the slimmed-down Telecom Italia.
His comments follow the decision last week by Telecom Italia’s board to look into the possibility of hiving off the operator’s networks division.
The move could help the Italian telecoms incumbent to reduce its net debt, although Bernabe reportedly told Il Messaggero that he expects this figure to fall to around €27.5 billion ($35.6 billion) by the end of the year anyway – relieving much of the pressure on the company.
Telecom Italia reported net debt of €29.5 billion at the end of September, some €929 million less than it claimed a year earlier.
A spinoff would probably mean Cassa Depositi e Prestiti (CDP), the state financing agency, taking a minority stake in Telecom Italia’s networks division.
By ensuring that rivals can access infrastructure on the same terms and conditions as Telecom Italia, it could provide a major spur to broadband competition in Italy.
Indeed, in other countries where similar ‘separation’ has been carried out – such as the UK – the process has been seen as a catalyst for the development of a competitive broadband market.
Nevertheless, incumbent operators have naturally been resistant to any sweeping changes aimed at weakening their position, sometimes demanding so-called ‘regulatory holidays’ in other areas as a concession.
While UK regulatory authority Ofcom insisted on a partial carve-up of BT (London, UK), it has subsequently exempted some of the operator’s next-generation broadband investments from the usual regulation.
Telecom Italia’s board has also confirmed it will turn down the €3 billion investment offer from Naguib Sawiris, an Egyptian billionaire, and will aim to sweeten the terms connected with its offer of TI Media, its television business, having received two bids that were significantly below market value, as reported by the Financial Times newspaper.