The Italian government is pressing on with plans for a single broadband company that would bring together the networks of Telecom Italia and Open Fiber, but this could lead to significant job cuts, Reuters reported.

Italy wants a framework for the merged network company that will enable regulated returns on investments made.

Before that happens, Telecom Italia may decide to spin off its infrastructure, and move 40 to 60 per cent of the 50,000 people it employs in Italy to the new venture. Sources told Reuters this could mean the operator is unable to sustain all of its remaining employees, which could lead to some 10,000 job cuts.

The idea of a single network operator was proposed by the new government, elected in June, to help Italy catch up digitally with other European countries.

Luigi Gubitosi, recently appointed Telcom Italia’s new CEO, said he would look at the issue with “speed”. His predecessor, Amos Genish, wanted to keep Telecom Italia together.

The value of Telecom Italia’s copper and fibre networks is one of the factors that cause friction. While it beleives they are worth between €13 billion to 15 billion, Open Fiber said any talks on a deal would value the operator’s infrastructure at €7 billion to €8 billion.