Telecom Italia Looks For Investors In Data Center Spin-Off

Italy’s largest telco plans to split-off 23 data centers and list them on the stock market to pay off debts.

According to Bloomberg and Reuters, Telecom Italia SpA CEO Luigi Gubitosi wants to attract investors for the first half of next year, ahead of an IPO.

This is not the first time Telecom Italia have split off a portion of their assets into a separate company: Four years ago, the Italian company hived off its wireless towers into a separate company called Inwit. Since listing it on the Milan Stock Exchange, Inwit’s shares have more than doubled.

As one of the biggest telco debtors in Europe, Telecom Italia is trying to raise funds to cut its debt. Moody’s, an American credit rating agency, rated the company’s own debt with a Ba1 grade negative outlook in 2015.

In 2013, the total amount of the company’s debt was about €26 billion ($28.5bn); as of 2019 it is €29bn ($32bn).

Telco data centers up for grabs

Recently such assets have been increasingly under the hammer.

Only last week, Mexican telco Axtel sold three data centers to Equinix for about $175m.

In May, Telefonica SA agreed to sell 11 data centers to Asterion Industrial Partners for €550m ($600m). Earlier this year, AT&T completed the sale of its assets to Brookfield Infrastructure and its institutional partners for $1.1 billion.

In 2016, Verizon sold its data centers to Equinix for $3.6 billion, as it focuses on its media division. The move was soon followed by CenturyLink, which sold 57 data centers for $2.3bn to a consortium that became Cyxtera.

And, as early as 2015, Arkansas telco Windstream sold its data center arm to TierPoint for $575m, comprised of 14 facilities totaling 179,000 sq ft (17,000 sq m).―DCD