Wednesday, 08 April 2020

Italian govt begs TIM and Open Fiber to end fibre deadlock

by Harry Baldock, Total Telecom
Wednesday 26 February 20

The government is trying to broker a deal between the two companies to create a single broadband operator

Since last June, TIM and Open Fiber have been trying to hash out a deal to merge their fibre assets, but it has been anything but smooth sailing.   The two customers have been at loggerheads over the value of Open Fiber, as well as where funding will be found…

Since last June, TIM and Open Fiber have been trying to hash out a deal to merge their fibre assets, but it has been anything but smooth sailing.
 
The two customers have been at loggerheads over the value of Open Fiber, as well as where funding will be found.
 
In fact, little progress had been made by last December, when the companies notably traded blows: TIM’s CEO Luigi Gubitosi (pictured) criticised Open Fiber for deploying too slowly and building “fibre to nowhere” (Open Fiber has tenders to deploy fibre in Italian areas that some deem non-viable), while Open Fiber themselves said that a potential deal would not be favoured by the industry or the antitrust regulator. 
 
The Italian government, however, would really like to see this deal go ahead, to avoid the needless and expensive duplication of fibre deployment.
 
“The government encourages constructive discussions among parties to set conditions to integrate existing assets,” said a statement by economy minister Roberto Gualtieri.
 
Open Fiber is jointly owned by utility company Enel and Cassa Depositi e Prestiti, a state lender which also has a 10% stake in TIM. Thus, combining TIM and Open Fiber’s broadband assets would leave the government a modicum of control over a key part of the nation’s fibre infrastructure.
 
In recent months, TIM has sought investment from infrastructure funds, seeking a financial partner to buy out utility Enel’s stake in Open Fiber, but Enel has said it has little intention of selling its equity. 
 
Nonetheless, potential investors are beginning to emerge, with sources suggesting that American investment firm KKR may be in discussions with the Italian operator. 
 
 
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