TIM eyes revamp with spinoff plan
Telecom Italia is reportedly ready to part ways with its fixed network assets as it looks to cut its substantial debt.
The company’s board has given a mandate to CEO Pietro Labriola to cede control of its network to cut its US$31 billion gross debt, while its revenue in Italy has been shrinking as a result of an uber-competitive market.
According to sources, it will do this by breaking the phone carrier up into several separate units while looking to attract new partners.
TIM’s fixed access network and submarine cable unit Sparkle will be split into a separate entity called NetCo.
“NetCo can be the first example in Europe of a fibre network infrastructure and technologies hub available to the whole market and with a widespread presence across the country,” the firm said in a statement.
NetCo will carry US11 billion of the debt and its EBITDA is expected to rise to around US2.7 billion as of 2030. The newly formed company will also take 15,000 employees, or almost a third of all of TIM’s staff.
Labriola’s top priority had been to outline a plan to avoid a full sale of the company to US hedge fund KKR.
Earlier this year, TIM signed an agreement with state investor CDP to combine its fixed network assets with Open Fiber.
The merger was aimed at extending ultra-fast broadband across Italy while paving the way for one network in the country somewhere down the line.