|
Carrier Services
Deutsche Telekom In Race For Telecom Italia?
Speculation Mounts Of Rival AT&T Bid
by Ken Wieland
Deutsche Telekom, along with two major Italian banks, is - according to Italian press reports this morning - considering mounting a bid for a two-thirds share in Olimpia, a holding company that owns 18 percent of Telecom Italia.
The press reports come only days after expansionist-mode AT&T (see AT&T To Spend US$750 Million On Global IP) announced it was in "exclusive talks" until 30th April with Pirelli, which owns 80 percent of Olimpia, to purchase a third of the holding company.
As a condition of AT&T's proposal, its affiliate America Movil - which has mobile operations in Latin America and is controlled by billionaire Carlos Sim - would also acquire a third share in Olimpia.
Although Olimpia only owns 18 percent of Telecom Italia's shares, it nominates the Telecom Italia board members and so controls the Italian incumbent.
According to a Reuters report today, friction between Olimpia and Telecom Italia is growing with the holding company voting to sack Guido Rossi, chairman of Telecom Italia, due to a disagreement over strategy. Pirelli chairman Marco Tronchetti Provera had favoured a strategic tie-up with Telefonica, which was rejected last month by Rossi.
Potential Suitors Line Up
AT&T's offer for Olimpia, subject to due diligence, values Telecom Italia at €2.82 per share minus the net debt of the holding company. Telecom Italia's share price at the time of going to press was €2.45, up from the €2.15 levels it was trading at prior to AT&T's announcement.
Deutsche Telekom, along with France Telecom and Telefonica, has been linked with a move for Telecom Italia before. And in the last few weeks, Telecom Italia has been rumoured as a possible buyer of T-Online France (see France's IPTV dark horse?), which is owned by Deutsche Telekom.
A Deutsche Telekom spokesperson would not confirm or deny that the German incumbent was in talks with Mediobanca and Generali, which have the first rights of refusal on the Olimpia shareholding. AT&T and America Movil would each get €16 m in compensation if the two banks chose to exercise that right.
Telecom Italia's Domestic Woes
The latest bout of speculation surrounding the future ownership of Telecom Italia comes at time when the national incumbent has found the going increasingly tough in its domestic market and is seeking to expand in Europe (see Telecom Italia Buys AOL Germany). Broadband growth for the incumbent's Italian operations is now single-digit and fixed and mobile revenue is predicted to fall between 2.5 percent and 3.5 percent this year compared to 2006.
A bright spot for Telecom Italia is its mobile operations in the emerging markets of Latin America, where annual revenue increases of 10 percent are projected until 2009.
Telecom Italia estimates that if it is to position itself more competitively at home and abroad, it will have to invest a massive €15 bn in network and back-office upgrades through till 2009.
A spokesperson for AT&T is not fazed by Telecom Italia's predicament. "We can make good synergies through the use of our global network and also share our technology know-how in developing services such as IPTV," he says.
More Information:
AT&T To Spend US$750 Million On Global IP
Emerging Market Growth Spurs Doubling Of Annual Investment
France's IPTV dark horse?
T-Online France is attracting a long list of suitors as it makes its mark in the most competitive IPTV market in the world
Telecom Italia Buys AOL Germany
EUR675 Million Offer Reaffirms New Strategy, Says Italian Incumbent
C5: BT, Telecom Italia Disagree On NGN Marketing
‘How Much Should Customers Know?’ Ask Operators
|
