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Weakened Telecom Italia is about to sell its home network


Telecom Italia is ready to take the plunge. The Italian operator is about to sell its fixed telecommunications network and its international activities (Sparkle). Two camps oppose for this takeover: on the one hand, the American fund KKR, interested for more than a year; on the other, the duo formed by Cassa Depositi e Prestiti (CDP), the Italian equivalent of the Caisse des dépôts et consignations, and the Australian investor Macquarie. Telecom Italia has given the two contenders until April 18 to submit improved offers, deeming the 20 billion euros initially advanced insufficient. Having become a tenant of this fixed infrastructure, the operator could then devote itself entirely to the marketing of subscriptions as well as to the operation of its mobile network and its ancillary activities (cloud and cybersecurity).

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This major separation between the network company (Netco) and the service company (Servco) would mark the culmination of a strategy pushed in recent years by the financial markets as a response to the difficulties of operators. Several competing groups, like Altice, have already yielded to this logic. But never has a historic player the size of Telecom Italia dared to take the plunge on its domestic market.

Delay in fiber deployment

Did he have another choice? The Italian needs fresh money to meet its 20 billion euros in net debt as of December 31, 2022. This weight prevents it from financing the conversion of its ADSL lines to fiber optics and explains the delay in l Italy in the deployment of this new technology. According the European Commission’s digital index for 2022, fiber covers just over 40% of the country, 20 points less than in France and 40 less than in Spain. This is why the Italian government, which has a preference share (golden share) in the capital of Telecom Italia, does not want to lose control of such a strategic asset. He therefore pushes for the buyout offer filed by the tandem between CDP and Macquarie. The Caisse already holds 9.81% of the capital of Telecom Italia.

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Another shareholder has an interest in raising the stakes. This is the French Vivendi, holder of 17.04% of the operator. Arrived at the capital in 2015, the group of Vincent Bolloré has never managed to make its investment profitable. In 2022 alone, he had to depreciate the value of his stake by 1.3 billion euros, in addition to the 728 million lost in 2021.