A Telecom Italia proposal to spin-off its fixed network but retain ownership of the newly created company was turned down by the country’s communications regulator, subject to the result of a public consultation.
In a lengthy document, regulator Agcom warned the plan did not go far enough and was unlikely to significantly increase competition in the fixed market in the majority of the country.
Telecom Italia’s network separation strategy was unveiled by former CEO Amos Genish in March 2018, but was one of the contentious points raised by activist investor Elliott Management when it began a campaign to wrest control of the company’s board from Vivendi.
Execution of the plan as it stands would mean the creation of a new company named NetCo containing the company’s fixed asset portfolio. It was a response to years of government pressure to try and force the separation of Telecom Italia’s fixed network to aid competition in the country.
In Genish’s strategy, NetCo would be operated as an independent entity, but be fully owned by Telecom Italia.
During its campaign to oust the operator’s previous board, Elliott Management said official NetCo strategy did not go far enough and a stake in the business should be sold off.
Having won the savage battle for the boardroom, the new directors publicly backed Genish’s plan before eventually sacking the executive. However, the company’s present strategy, including retaining full control of NetCo, remains official policy.
Agcom’s decision will now go to a 45-day public consultation.Subscribe to our daily newsletter Back