By Francesca Landini and Elvira Pollina
TRENTO, Italy (Reuters) -Telecom Italia’s (TIM) will pursue a plan to split its landline network from its service operations to maximise asset value for all its shareholders and cut debt, the head of Italy’s biggest telecoms company said on Sunday.
Under pressure for years in its fiercely competitive domestic market, Italy’s former phone monopoly is seeking to revamp its business via a full-blown separation of its domestic fixed network assets to focus on retail and commercial activities.
As part of a preliminary pact sealed with Italian state lender CDP last week, TIM’s network assets would be combined with those of state-backed broadband rival Open Fiber to create a single national network company under state control.
But Telecom Italia’s top investor Vivendi, whose support is key for any deal to go through, said it would be ready to evaluate other opportunities if the network value is not recognised in the single broadband plan.
“The most important thing is to maximise the value of all assets in the interest of all shareholders,” Telecom CEO Pietro Labriola said in response to a question over whether Vivendi’s stance could hamper the project.
CDP, which is TIM’s second-largest investor with a 10% stake, also owns 60% of Open Fiber.
Speaking at an economic event in Trento in northern Italy, Labriola declined to say whether TIM was considering a full exit from its landline network business with an outright sale.
He emphasised that any spin-off would be designed to cut TIM’s 23 billion euro ($24.65 billion) net debt.
“It is seems to me that all parties (involved in the single network project) are interested in understanding quickly enough if the plan is feasible,” Labriola said, adding the creation of a single fiber network could be completed in 12-18 months
A veteran in the telecoms sector, Labriola, who took the helm of the company in January, is due to present a three-year business plan on July 7 which will be focused on the break-up of TIM’s operations.
($1 = 0.9330 euros)
(Reporting by Francesca Landini, Elvira Pollina; Editing by Catherine Evans and Jane Merriman)