Telecom Italia Boss Confident on Network Merger Talks

Telecom Italia CEO Pietro Labriola said the operator could seal a deal to merge its fixed network with state-backed Open Fiber in a matter of days. During a press conference, Labriola said all parties involved in the fixed-line businesses were keen to agree on a deal, despite some delays.

Labriola indicated US investor KKR, which owns 37.5% of Telecom Italia’s FiberCop fixed-line business, and Open Fiber shareholder Macquarie Asset Management are involved in the talks. TIM kicked off the network merger discussions with state lender CDP last month, reviving a long-standing plan to create a single fiber network company in Italy.

It was speculated the move could form part of TIM's plan to reject a €10.8 billion non-binding takeover offer made by KKR in November 2021. During the press briefing, TIM representatives also indicated a reorganization to separate into two units by splitting infrastructure assets from services operations will be unveiled at its capital market day on 7 July.

TIM reported a net loss of €204 million in the first quarter of 2022. In the same period last year, the loss was €228 million. Domestic sales fell 7.7% to €2.8 billion while total group service revenue decreased 2.5% to €3.4 billion. Telecom Italia stated that mobile subscribers were broadly unchanged at 30.4 million, or 18.8 million excluding machine-to-machine connections. It added its 5G network had reached 66 municipalities.

A recent market update by Italian regulator Agcom for 2021 shows that CK Hutchison-owned WindTre had a 26.5% share of the domestic mobile market excluding M2M. Telecom Italia held 25.5% share, Vodafone Italia 23.1%, and Iliad Italia close to 11%.