Telecom Italia Board Approves National Landline Network Spinoff
Telecom Italia’s board authorized CEO Amos Genish to spin off its fixed-line network to improve rivals’ access to an asset that is the focal point of Italian concern about Vivendi’s influence over the former phone monopoly, according to Bloomberg.
The national network has a book value of about 15 billion euros, slightly less than the carrier’s current market value. With a stake of almost 24 percent, Vivendi is Telecom Italia’s biggest investor. The company will create a separate unit for the network, but continue to fully own the grid, it said in a statement Tuesday. The spinoff plan will grant competitors “absolute equality” of access to the network, Telecom Italia said.
A separation of Telecom Italia’s fixed-line grid will stoke domestic competition by guaranteeing a more level playing field for rivals who want to rent broadband and phone capacity for resale. It would also increase valuation transparency and a provide a significant value release for the carrier, analysts have said.
Telecom Italia also said it plans to add more than 5 million new fiber broadband customers by 2020, part of a new three-year new business plan approved by the board. By the end of that period, the carrier targets fourth-generation mobile coverage of 95 percent of Italy’s population, from 76 percent currently. It also aims to triple the number of subscribers to internet video on demand service TIMVision, from about 1.3 million now.