ROME--Telecom Italia SpA (TI) will decide Thursday on whether to
spin off its fixed-line network due to new European Union
regulations, Chief Executive Marco Patuano said in an interview to
be 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.
The company is already investing in a fiber-optic network but
that doesn't necessarily mean it will back off from the plan to
sell the copper wire network, 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 and 300 million euros for Telecom
Italia's television assets, which are 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, which is the sum of its current market capitalization of
around EUR242 million and EUR224 million in debt.
Newspaper Web site: www.ilsole24ore.com
Write to Rome bureau at djnews.rome@dowjones.com
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