The operation will pave the way for a single broadband network, as TIM CEO Pietro Labriola develops a turnaround plan centered on a complete separation of the group’s fixed-line network from service operations.
The boards of TIM and CDP are due to meet on Sunday to approve a framework agreement, with the aim of negotiating a binding agreement on a network connection with Open Fiber by October, one of the sources said.
Under the framework agreement, CDP, which is TIM’s second largest investor with a 10% stake and owns a 60% stake in Open Fiber, would control the combined network entity, the sources added.
Italy wants to create a single champion of the broadband network in order to avoid duplication of investments, to accelerate the deployment of optical fiber and to promote the digitalisation of the economy.
Under pressure for years in its home market, debt-ridden TIM plans to divest itself of its landline network, an asset analysts have pegged at between 15 and 20 billion euros ($16 billion). – $21.45 billion).
Although the final structure of the deal with Open Fiber has not been decided, options under discussion include an outright sale of TIM’s landline network, two separate sources said.
The framework agreement has the backing of infrastructure funds Macquarie and KKR, which hold minority stakes in Open Fiber and the TIM network respectively, the sources said.
KKR, which spent 1.8 billion euros to buy a 37.5% stake in TIM’s last mile networking unit, FiberCop, and attempted a 10.8 billion takeover bid. euros for TIM, has previously expressed concerns about regulatory and valuation issues related to the single network plan.