ROME--Telecom Italia SpA (TI) will decide Thursday on whether to
spin off its fixed-line network on the basis of European Union
regulations, Chief Executive Marco Patuano said in an interview
published Tuesday in Il Sole 24 Ore.
Soon-to-be promulgated regulations appear to be more "agnostic"
about whether companies own or use old copper-wire networks, which
means Telecom Italia's "historic decision" to spin off the network
is now an "open question," Mr. Patuano said.
The plan, to be reviewed at a Dec. 6 board meeting, was expected
to allow Telecom Italia to reduce its debt load by selling the
copper-wire network offering last-mile connections to italian
households to a new entity controlled by postal lender Cassa
Depositi e Prestiti SpA.
Regulations aimed at setting costs are effective only for
existing infrastructure, while for new-generation networks the
crucial matter is allowed returns on investment, Mr. Patuano said.
Telecom Italia plans to invest, he added.
The company is already investing in a fiberoptic network but
that doesn't necessarily mean it will back off the plan, the CEO
said.
He said the need to invest in updated infrastructure would lead
to a rationalization of Italy's telecom industry in the next three
to five years, with at least one company "disappearing or getting
absorbed."
Il Sole 24 Ore separately reported that private-equity fund
Clessidra and Cairo Communication SpA (CAI.MI) each plan to make
offers of between 250 million euros ($324.6 million) and EUR300
million for Telecom Italia's television assets, which form part of
its Telecom Italia Media SpA (TME.MI) subsidiary and include the
La7 free-to-air broadcasting channel.
Those sums are well below Telecom Italia Media's enterprise
value, the sum of its current market capitalization of around
EUR242 million and EUR224 million in debt.
Newspaper website: www.ilsole24ore.com
Rome Bureau, Dow Jones Newswires; +39 06 6976 6920
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