Telecom Italia open to network spinoff as CEO weighs options
-
Loading... - Lucy Richard
- 27 Jan 2022
- 416 Views
- 0 Like
- 0 Comment
Telecom Italia (TIM) (TLIT.MI) on Wednesday opened the door to a spin-off of its prized infrastructure assets, saying its newly appointed chief executive would explore options to create value for shareholders.
Italy's embattled former phone monopoly will also continue to study a takeover approach by U.S. fund KKR (KKR.N) and compare it with possible strategic alternatives.
TIM, which is wrestling with shrinking revenues in its hyper-competitive domestic market, on Friday named General Manager Pietro Labriola as CEO, its fifth boss in six years.
Under fire after a string of profit warnings, former CEO Luigi Gubitosi quit in November, a week after KKR tabled a 10.8 billion euro ($12.18 billion) non-binding bid to take the group private, to which TIM never responded.
Labriola on Wednesday outlined internally a new three-year plan which he has been working on since becoming general manager in November.
"The CEO underscored the need to guarantee a stable, long-lasting growth outlook for the network infrastructure, in the interest of all stakeholders," TIM said.
As Italy's biggest telecoms infrastructure, TIM's network is deemed strategic by Rome, which is keen to boost connectivity for businesses and households.
KKR last year invested 1.8 billion euros in TIM's fixed line, buying a 37.5% stake in the "last-mile" network to homes.
The board unanimously gave a mandate to Labriola to explore options, "with specific reference to the group's infrastructure assets, including solutions that go beyond vertical integration," it added.
No other phone incumbent in Europe has completed a full-blown separation of network from services, but analysts increasingly see it as the only way for debt-laden TIM to invest in the upgrade of its dated infrastructure.
Sources had previously said TIM would pursue the separation so as to have its services and infrastructure assets each carry a portion of its debt and staff.
Once it lost control of the network, TIM would concentrate on a wide range of telecommunications services and could seek a merger with a peer as the sector consolidates, sources had said. Read More….
