Italy Regulator Gives TIM’s Network Separation Plan Thumbs Down

Telecom Italia has suffered a setback in its plan to assuage pressures for a separation of its prized network assets by placing them into a wholly owned subsidiary, as the industry regulator said it was opposed to the proposal.

TIM has been under pressure for years from Italian politicians, regulators and rivals to separate and upgrade its network, which analysts have valued at up to 15 billion euros (USD 17 billion).

Before being ousted in November former TIM chief Amos Genish set out a plan to spin off the network into a fully controlled separate company, but communications regulator AGCOM has given an initial thumbs down to the idea since TIM would continue to have significant power in the market.

In a document published on its website the watchdog said it was launching a 45-day public consultation on the plan, results of which would help it draw up a final decision in coming months.

A spokesman for TIM declined to comment.

Italy’s biggest phone group gives rivals such as Vodafone (VOD.L), Wind and Fastweb (SCMN.S) access to its network infrastructure, but also competes with them when it sells its own telecom services to customers.

AGCOM said that under TIM’s plan, by keeping control of the new company it would be in the position of being able to favor its own companies to the detriment of competitors.

Pressure on TIM to spin off its fixed access network intensified after French media group Vivendi (VIV.PA), the Italian phone group’s biggest shareholder with a 24 percent stake, named Genish at the helm of the group in September 2017 and began to exert greater influence, which upset the Italian government.―Reuters