TIM board ‘to consider FTTH merger with Open Fiber at Thursday meeting’

26 June 2019 | Alan Burkitt-Gray

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The board of Telecom Italia is expected tommorow to consider merging its fibre-to-the home (FTTH) operation with that of rival company Open Fiber, according to reports.

Alternatively the board of the company, now known as TIM, will consider an outright takeover of Open Fiber, which is a joint venture of Enel, the Italian electricity company, and Cassa Depositi e Prestiti (CDP), a state bank. However, that is seen as less likely, because of regulatory concerns. 

A merged fibre operation would act as a wholesale network to which all retail operators in the Italian market would have access. It will not involve Sparkle, the international network owned by TIM. 

A merger or a takeover is not a new idea – in January TIM’s new CEO, Luigi Gubitosi, revived a project that may lead to a merger of its fixed infrastructure with that of Open Fiber; days later Giovanni Tria, the Italian minister of economy and finances, said a single telecoms network in Italy would be a more efficient solution and added that the government could be expected to favour it.

In February Gubitosi met Elisabetta Ripa, CEO of Open Fiber, to discuss a possible merger of their national fibre networks, TIM confirmed to Capacity. Ripa is a former TIM executive who was CEO of Sparkle from 2013 to 2015. 

But this is believed to be the first time the topic has actually reached the board’s agenda. The Reuters news agency reported this morning that directors will discuss the items at Thursday’s meeting. However TIM did not respond to requests for confirmation or comment from Capacity.

The merger would involve Flash Fiber, 80% owned by TIM and 20% by Swisscom subsidiary Fastweb, and Open Fiber. CDP, the 50% owner of Open Fiber, is also a substantial shareholder in TIM, whose main shareholders are French media company Vivendi and US-based activist investor Elliott Partners.

According to an unnamed source of the Reuters report, a strategic committee meeting discussed the options on Monday and will present them to TIM’s board on Thursday.