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Telecom Italia boss expects trouble-free network sale

Published 02/15/2024, 05:43 AM
Updated 02/15/2024, 12:18 PM
© Reuters. FILE PHOTO: Telecom Italia (TIM) logo and stock graph are seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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By Elvira Pollina

MILAN (Reuters) -Telecom Italia (TIM) does not expect any specific antitrust obstacles to the planned sale of its fixed-line network assets to U.S. fund KKR, the Chief Executive of Italy's biggest phone group said on Thursday.

The deal, worth up to 22 billion euros ($23.6 billion), is a key plank of Pietro Labriola's revamp of the battered former phone monopoly, aiming to reduce TIM's debt pile and offload more than a half of its domestic workforce.

"We don't foresee specific issues... at the antitrust level," Labriola said in a post-results call, arguing that the deal would not create any "concentration" in the market.

The executive confirmed that the deal is expected to close in the middle of this year, subject to approval from the EU antitrust regulator.

Labriola downplayed concerns that rivals operators reportedly raised with EU regulators about the relationship between the wholesale-only network that will be sold to KKR and TIM's remaining service business.

In a legal challenge to the deal, TIM's main investor, France's Vivendi (OTC:VIVHY), also asked the EU antitrust watchdog to look into the role played by the Italian Treasury in plans to later combine TIM's grid assets with those of state-backed rival Open Fiber.

Italian telecoms operators have been looking at M&A to reshape a market where intense price competition has eroded earnings and revenue per user is among the lowest in Europe.

Vodafone (NASDAQ:VOD) is in talks with Swisscom on a potential deal to combine their respective Italian operations after the British telecoms company dropped an approach by French low-cost operator Iliad.

A Vodafone-Iliad tie up would have been a better option from a "market repair" perspective, TIM's Labriola said, adding that his company needs to be ready to play a role in consolidation once its network sale is completed.

Labriola, who is seeking a second term at the helm of the former phone monopoly, is set to outline a new three-year business plan for TIM on March 7

© Reuters. FILE PHOTO: Telecom Italia (TIM) logo and stock graph are seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

With its 24% stake, Vivendi could be the main hurdle for Labriola's reappointment at the TIM shareholder meeting scheduled for April.

($1 = 0.9316 euros)

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