TIM warns falling wholesale prices may hit network separation plan

TIM warns falling wholesale prices may hit network separation plan

Italian regulator AGCom is starting a public consultation on TIM’s network separation plan – but TIM’s CEO Amos Genish is worried about falling wholesale prices.

The separate NetCo could be operational at the beginning of 2019, Genish said after the regulator decided TIM’s project to divide the company was “acceptable”.

The regulator, Autorità per le Garanzie nelle Comunicazioni (AGCom), will now include network separation in a public consultation with operators for market analysis on network access.

A TIM spokeswoman told Capacity that “this is a positive outcome”, because including network separation in a wider enquiry was “much faster than having an ad hoc consultation solely on NetCo project”.

NetCo will include all national infrastructure in Italy but will not own Sparkle, the international wholesale network. Genish welcomed AGCom’s decision, saying it was “a milestone” and confirming the plan to launch NetCo by early January 2019. “AGCom is satisfied by all the documents we have presented,” he said. But he called on “everyone to play their part” in developing the regulatory framework. “It is not a one-sided act.”

Genish said he was concerned that an annual decline of wholesale access prices “does not always seem to take into account NetCo’s actual cost and sustainability”.

TIM – formerly Telecom Italia – said the annual price decline was “dramatic”. Italy now has 78% coverage of ultra broadband infrastructure, said the company, but the price level “is among the lowest in Europe”.

TIM said it hoped and expected “an evolution of the regulatory landscape allowing NetCo to be a sustainable and independent business, capable of affording the investments needed to give Italy and the market a technological best-in-class infrastructure”. The TIM spokeswoman told Capacity: “We hope Italy will no longer be the only country in Europe where almost all access services are regulated on a cost-based basis; with some services – such as fibre unbundling and fibre bit-stream – that are regulated only in Italy among the main EU countries.”

Meanwhile a court in Milan has cancelled a €74.3 million fine that it imposed on TIM last year for failing to notify the authorities that it was under the control of Vivendi.

The French media group was then the largest shareholder in TIM, but since then has lost control to a group of activist shareholders led by Elliott Advisors, which now has voted in most of TIM’s board. The court said it would reveal its reasons on 4 July.

Gift this article