Telecom Italia to spin off fixed-line network?

07 December 2012 | Kavit Majithia


Telecom Italia’s board has told management to investigate a spin-off and a potential sell off of its fixed-line network as a means to raise funds for burgeoning debt.

The company also said it would attempt to improve conditions on two bids it has received for its television business, TI Media, which is below market value according Telecom Italia.

The Italian operator has been under pressure from shareholders to boost its stock market position, which is €0.70 down from desired levels.

Investor group Telco owns 22.4% of Telecom Italia, which includes Spanish operator Telefónica and a range of other Italian financial groups.

A potential spin-off of the network has been perceived as good news for the Italian broadband market, where access lags behind the UK and France. It could also see the entrance of the state as a minority investor, and its financing agency could potentially introduce tax exemptions for projects of up to €500 million.

However, according to the Financial Times, the company is reportedly required to keep control of the network as a surety against its debt, and there are disagreements between the company and state over the value of the fixed-line network.

Telefónica, too, is reportedly against a network spin-off.