TIM Signs Agreement With Enel, CDP To Begin Talks On Open Fiber Network Tie-Up

Telecom Italia (TIM) has announced the signing of a non-disclosure agreement with utility giant Enel and state lender Cassa Depositi e Prestiti (CDP) to begin negotiations on ways of integrating its own fibre-optic network with that of wholesale operator Open Fiber. “The objective of the discussions is to verify the feasibility of such an operation, the related procedures and the perimeter of activity subject to a possible agreement, based on the will of the parties and on the legislative and regulatory frameworks,” said TIM in a brief statement.

The announcement comes after Open Fiber CEO Elisabetta Ripa admitted earlier this month that her company was “evaluating ways of integrating or collaborating with TIM”, while TIM CEO Luigi Gubitosi recently told reporters that negotiations between the two companies are “quite advanced” and that the merger of their respective fixed broadband networks would be “a positive step for both companies”.

Open Fiber is jointly owned by CDP and Enel, with the state lender also becoming TIM’s second largest shareholder earlier this year with a stake of around 9.9 percent. CDP is expected to play a central role in the proposed creation of a single national network, with several reports suggesting it’s considering the possibility of selling its 50 percent stake in Open Fiber to TIM, which would issue shares in return for the holding.

A report in La Repubblica said TIM’s advisers have valued Open Fiber at EUR 2.2 billion to EUR 2.8 billion, including debt, and that TIM’s CEO has an alternative plan of pressing ahead alone if the company is unable to acquire CDP’s stake in Open Fiber at a reasonable price.

Separate reports, including one in MF-Milan, have also again suggested that TIM is looking to merge Open Fiber with Flash Fiber, a joint venture set up with Fastweb in 2016 that’s valued at around EUR 1.1 billion.—Telecompaper