TIM approves full fixed-network separation in Italy

07 March 2018 | Alan Burkitt-Gray

The board of directors of TIM – formerly Telecom Italia – has approved a plan to create a separate legal entity that will own its fixed network.

The new wholesale company, which will be 100% owned by TIM, will own the access network from the exchange up to customers’ homes and all the infrastructure, including buildings, electronic equipment and IT systems.

This Openreach-like structure will be the single interface for fixed access services to all operators, including TIM, said the company last night.

The Italian government has not reacted to the proposals as parties are still in discussions following Sunday’s inconclusive elections. The previous government opposed the control of critical national infrastructure, including TIM’s national and local networks and Sparkle’s international networks, by Vivendi, a French company.

Separation of TIM into an infrastructure company and a separate services company might go some way to answer some of these concerns – except that TIM is proposing that it will own 100% of its so-called Netco, which ultimately means it is still controlled by Vivendi, the biggest shareholder in TIM.

The board has given TIM’s CEO, Amos Genish, the power to start the formal procedure to notify Italy’s telecoms regulator, Agcom, of its "request for a voluntary separation of its fixed access network", it said.

TIM said: "The project represents a turning point and establishes the most advanced network separation model in Europe, by creating a 'one-stop-shop’ access point for regulated and unregulated wholesale services for all operators including TIM, delivering a fully neutral and equivalent model."

TIM added: "The Netco will have the investment capabilities to maintain the highest quality network and help Italy meet the European 2025 Digital Agenda ultra-broadband goals. The initiative will contribute significantly to further develop the digitalisation of the country, supporting the evolution of the current regulatory framework."

At the same board meeting, the company’s directors approved a strategic plan for 2018-20, which it calls DigiTIM. It is aimed at improving customer engagement, capturing new growth opportunities, accelerating cash flow generation and increasing shareholder return; and implementing a new agile organisation and a "performance-based and data driven culture".

The programme will see a 30% increase in Sparkle’s transformation capex, and a 25 new IP points of presence. "Sparkle will pursue international expansion a data opportunities," said the board after its meeting.

The company plans to increase its ICT and cloud business by 50%, "reaching 25% of business segment total revenue by 2020", and it plans to triple the fibre customer base to more than 1 million.

"Wholesale will return to growth," said the board, while ultra broadband lines with other operators "will grow from about 1 million to about 3 million".

Topics: TIM, Telecom Italia, Sparkle, network separation, Netco, Vivendi, Genish, Agcom