Wednesday, 21 April 2021

Italy’s new government uncertain about national network’s future

by Harry Baldock, Total Telecom
Friday 19 March 21

Led by Mario Draghi, Italy’s new government has yet to confirm whether it intends to pursue the merger between Open Fiber and TIM that would create a single national network

Back in February, Mario Draghi was sworn in as the new prime minister of Italy, taking over from the Giuseppe Conte. Nicknamed ‘Super Mario’ for his role in saving the euro, the ex-European Central bank chief was viewed as a safe pair of hands for the company, particularly for the telecoms sector.    However, now over a month has passed and there seems little progress regarding the merger of Open Fiber and the fixed assets of TIM…

Back in February, Mario Draghi was sworn in as the new prime minister of Italy, taking over from the Giuseppe Conte. Nicknamed ‘Super Mario’ for his role in saving the euro, the ex-European Central bank chief was viewed as a safe pair of hands for the company, particularly for the telecoms sector. 
 
However, now over a month has passed and there seems little progress regarding the merger of Open Fiber and the fixed assets of TIM, a move which could create a singe national broadband network. The new government has yet to confirm whether it will still be pursuing this strategy, which was first conceived back in 2019.
 
On Wednesday, at a parliamentary hearing,  Industry Minister Giancarlo Giorgetti said he was unsure of the projects future and said it was being re-examined by the new government. 
 
“I’m not sure whether the plan for a single network is right or wrong. It makes sense if its under state control. We won’t re-create a private monopoly on the network,” he said.
 
Over the course of last year, TIM had been loathe to agree to a deal, wishing to have majority control of the new business. The government were reluctant to make such a concession, but eventually did so around September, provided TIM agreed to allow all market players equal access to the network.
 
Since then, however, the changing of the guard in government has seen the process stall, with the uncertainty becoming a major obstacle for the country’s broadband rollout.
 
“We can’t afford to be in a wait-and-see situation which risks threatening the plans and the timing for the broadband rollout, funded by the European recovery plan,”said Innovation Minister Vittorio Colao. “We need to reach a solution in order to ensure a speed-up in rollout activities.”
 
According to Colao, Italy is currently aiming for fast connectivity across the whole country by 2026.
 
“This stalemate must be overcome and the state as shareholder of the companies involved has a responsibility to make a quick proposal on the matter,” said Giorgetti. “If the single network offers a level playing field for all, it is a good thing ... but if the creation of the (joint) company takes 18 months and in the meantime everyone makes investments to make maximise their position, we create overlaps and waste resources.”
 
Enel, the utility company that currently own 50% of Open Fibre, are currently looking to sell their share to Australian infrastructure group Macquarie for around €2.65 billion. Enel’s CEO, Francesco Starace, said he expected the deal to be finalised in the coming months and enacted by the end of the year. 
 
Commenting on the potential merger of Open Fiber and TIM, Starace said that the shift in government had not, in fact, had a significant impact on the outlook of the deal.
 
"The change of government hasn't changed the outlook of the deal, I have no signal in that sense," he said.
 
 
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