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Italy’s TIM, CDP set to clear preliminary accord on single network


© Reuters. FILE PHOTO – The Tim logo can be seen in its Rome headquarters on November 22nd, 2021. REUTERS/Yara Nardi/File Photo

MILAN (Reuters). Telecom Italia (BIT.) (TIM), and CDP, the state lender, are expected to sign a preliminary agreement Sunday on the merger of fixed network assets belonging to the phone company with Open Fiber (state-backed rival broadband provider), according to sources.

This move will open the door to a single broadband network as TIM CEO Pietro Labriola creates a turnaround plan that focuses on a complete split of the group’s landline grid and service operations.

One source said that the boards of directors for CDP and TIM are expected to meet Sunday in order to approve a framework deal. The goal is to negotiate a binding agreement on a network connection with Open Fiber by October.

Sources said that CDP (TIM’s second largest investor) would have control of the new network entity under the framework agreement. It holds a 10% share in Open Fiber and a 60% interest in TIM.

Italy seeks to have a single champion for broadband networks to reduce duplication and speed up rollouts.

TIM, a debt-laden company, has been under pressure in the domestic market for many years and is now planning to hive its landline network, which was valued at 15-20 billion euro ($16-$21.45 billion).

Open Fiber is yet to finalize the arrangement, but options are being discussed, according to two sources.

According to sources, infrastructure funds Macquarie & KKR have backed the framework agreement, with minor stakes in Open Fiber et the TIM network, respectively.

KKR spent 1.8billion euros on TIM’s last mile unit FiberCop. It also attempted a 10.8billion euro takeover. TIM has expressed concern over the regulatory and valuation aspects of its single network plan.