TIM's board to discuss network options this week: source

Technology


MILAN (Reuters) – The board of Telecom Italia (TIM) will this week discuss options for its fixed-line network, including possibly splitting it off, although no decision is expected to be made, a source close to the company said on Sunday.

FILE PHOTO: FILE PHOTO: Telecom Italia logo is seen at the headquarters in Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini/File Photo/File Photo

Italian politicians and rival firms have long called on the former monopoly to separate and upgrade its network, an asset some analysts have valued at up to 15 billion euros ($18 billion).

The pressure has intensified since French media group Vivendi, TIM’s biggest shareholder with a 24 percent stake, began to exert greater influence, raising concerns within the Italian government, which considers the network a strategic national asset.

The source said recently appointed CEO Amos Genish, a former Vivendi top executive, would give an outline of his 2018-2020 business plan to the board on Dec. 5.

“As part of that presentation the CEO will also present the various options for the future of the network, including a potential separation,” the source said, speaking on condition of anonymity because of the sensitivity of the matter.

“No decision will be taken on Tuesday and the CEO will promise to come back with his recommendation for the network at a later stage.”

A second source close to the matter said Genish could be given a formal mandate by the board on Tuesday to study possible developments for the network, including a separation from the rest of the company.

Genish, formerly an Israeli army captain and Vivendi manager, became TIM’s boss in September, with a mission to fend off rising competition in Italy, turn around operations in Brazil and smooth strained relations with Rome.

He has held talks with Industry Minister Carlo Calenda which both sides described as positive. But TIM is keeping its options open and the center-left government’s hand is weakened by the prospect of national elections due by May 2018 which polls say are likely to result in a hung parliament.

Genish, who will present his business plan early next year, said last month TIM wanted to keep control of its fixed network but didn’t need to own it in full, adding the company would make a decision “on our terms when we really believe it’s needed.”

He told unions last week that from a regulatory point of view the company did not see any reasons for a greater degree of separation of the network for now.

Italy’s communications regulator AGCOM will decide by the middle of next year how to address competition concerns regarding TIM’s network, an AGCOM official said on Nov. 15.

There are three options open to the watchdog, the official said, including moving toward imposing a clearer functional separation of the network.

Writing by Silvia Aloisi; Editing by Mark Potter

Our Standards:The Thomson Reuters Trust Principles.



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