Telecom Italia CEO Pietro Labriola provided more details of a long-awaited plan to split the operator into two units as part of a wider strategy which aims to bring in new partners and cut debt.
In a statement ahead of the company’s capital market day today (7 July), Telecom Italia confirmed it will spin off its domestic fixed access network into a separate company called NetCo, which will also include its submarine cable unit Sparkle.
A new company called ServiceCo will then incorporate its consumer, enterprise and Brazilian units.
TIM Enterprise will include cloud consultancy Noovle, electronics manufacturer Olivetti and cybersecurity business Telsy, while the consumer unit covers fixed and mobile commercial activities including network assets and service platforms.
Telecom Italia stated the aim of the split is to “attract new industrial and financial partners”, which will include opening the door to new minority shareholders in the enterprise division.
Its capital markets presentation points to NetCo carrying around €11 billion of net debt, which Reuters reported stood at around €23 billion at end-March.
The news outlet added the goal is to reduce net debt after lease to below €5 billion.
Telecom Italia noted a plan to merge its fixed network infrastructure with that of its smaller rival Open Fiber “remains the priority/preferred option…but only if executed at attractive terms to both equity and debt holders”.
Should the Open Fiber transaction not go ahead, Telecom Italia indicated “alternative options” might include a sale to private investors or a “structural” separation.
Open Fiber CEO Mario Rossetti recently indicated a deal to create a single fixed network operator could be reached later this year.
Telecom Italia signed a preliminary agreement on the matter with state lender CDP, which owns 60 per cent of Open Fiber, in May.Subscribe to our daily newsletter Back