Telecom Italia, KKR and Fastweb Reach Agreement to Create Fibercop

Telecom Italia’s Board of Directors approved the agreement with KKR Infrastructure and Fastweb for the establishment of FiberCop. It is a new company to which TIM’s secondary network will be transferred along with the fibre network developed by FlashFiber, the joint venture in which TIM has an 80% and Fastweb a 20% stake.

The agreement is the first step towards creating an Italian digital fibre network company, which is a turning point for telecommunications in the country. FiberCop will allow TIM, Fastweb and other operators to co-invest, completing the fibre coverage plans in black and grey areas of the country and speeding up the adoption of Ultra-Broadband (UBB) services. Confirming the start of the project, in recent days TIM signed a Memorandum of Understanding with Tiscali to establish the terms of a strategic partnership intended to develop the ultra-broadband market through Tiscali's economic participation in the FiberCop co-investment plan.

FiberCop will be immediately assigned a network asset that today already offers 85% of the population UBB speed thanks to FTTC and FTTH technology. FiberCop will go on to assure FTTH coverage, with a connection speed of 1 Gbps, with the aim of reaching 76% of grey and black area property units, equating to coverage of a total of 56% of the country’s technical property units, by 2025. In the white areas TIM will continue the UBB deployment already in progress. The fibre network will be developed by the NewCo on the basis of the co-investment model open to all other operators, in accordance with the provisions of the European Electronic Communications Code.

The new company, of which TIM will hold 58%, KKR Infrastructure 37.5% and Fastweb 4.5%, will offer passive access services of the secondary copper and fibre networks to all operators. FiberCop will rely on the fibre infrastructure already installed by FlashFiber, without any duplication of investments and with maximum efficiency, at the same time promoting competition. TIM will be the exclusive supplier for the construction and maintenance of the networks and will provide additional services to FiberCop, which will have a streamlined structure with less than 100 employees.

TIM has accepted the binding offer of 1.8 billion euros from KKR Infrastructure, which will buy 37.5% of FiberCop, on the basis of an enterprise value of 7.7 billion euros (equity value 4.7 billion euros), while Fastweb will have 4.5% of FiberCop following the contribution of the 20% currently held in FlashFiber. It is expected that FiberCop will have EBITDA of around 0.9 billion euros, positive EBITDA - CAPEX starting 2025 and will not require capital injections from shareholders.