TIM takes a second look at network separation for new strategic plan

TIM takes a second look at network separation for new strategic plan

Network separation is back on the agenda at TIM, more than four years after former CEO Franco Bernabé resigned because the board rejected his proposals.

Bernabè came back on to the TIM board this year, nominated by largest shareholder Vivendi, and the company is now looking at the plan again.

In a statement following the latest board meeting the company said that CEO Amos Genish was looking at “different separation models”.

One possible model would see the creation of an open-access wholesale operator that could be used by a number of rival service providers in the Italian market. However, TIM has not yet specified which models Genish favours.

Genish, former chief convergence officer of Vivendi, has compared the models with other international cases, the company said, without going into details. “Over the coming months, the management will continue to examine various hypotheses to establish whether network separation is needed to address institutions’ input and to unlock value.”

Back in 2012-13 Telecom Italia, as it then was, looked at various proposals, including one to raise €4 billion by selling off its access network, and another to look at network integration with Tre Italia – Three Italy – and Wind.

But the board at the time ultimately rejected the network separation idea and Bernabè resigned as CEO, and also as chairman of the GSMA.

Now, says TIM, Genish has presented it with “an overview of the regulatory framework, taking into account the views of government officials and industry authorities”.

This is part of its work on the 2018-2020 strategic plan, which, says TIM, “will focus on a value driven strategy to maximise convergence and scalable bundles, leveraging its extensive ultra-broadband fixed fibre and LTE networks; it will be based on greater and improved use of data analytics and digitalisation, which will contribute to greater efficiency, allowing a better quality of service to customers and produce higher profitability and cash flow generation.”

Four-to-five years ago Telecom Italia had a number of models of network separation to compare. One was BT’s creation of Openreach as a last-mile division to give equal access to competitors. Since then, under regulatory pressure, Openreach has become a separate subsidiary of the BT group.

The other prominent model was Telecom New Zealand’s division into two separately quoted companies. One, Chorus, took over the fixed network. The other, now called Spark, runs services in competition with other providers.

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