((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
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CEO expects deal to close around mid-year
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The sale of the network is part of TIM’s recovery strategy
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Italian telecommunications companies seek to reshape the sector
(More information and details on the analyst conference call) by Elvira Pollina
Telecom Italia (TIM) TLIT.MI does not expect specific competition obstacles to the planned sale of its landline network assets to US fund KKR KKR.N, the chief executive of Italy’s largest telephone group said on Thursday .
The operation, worth 22 billion euros ($23.6 billion), is a key part of Pietro Labriola’s restructuring of the former telephony monopoly, which aims to reduce the company’s debt. TIM and get rid of more than half of its national workforce.
“We do not foresee any specific competition issues,” Mr. Labriola said in a telephone call after the results, asserting that the operation would not create “concentration” in the market.
The executive confirmed that the deal is expected to close mid-year, subject to approval from the EU competition regulator.
Mr. Labriola played down concerns that rival operators have reportedly expressed to EU regulators about the relationship between the wholesale-only network that will be sold to KKR and TIM’s remaining service businesses.
TIM’s main investor, France’s Vivendi VIV.PA, has also asked the EU competition authority to examine the role played by the Italian Treasury in plans to later combine TIM’s network assets with those from state-backed rival Open Fiber in a legal challenge to the deal.
Italian telecoms operators are considering mergers and acquisitions to reshape a market where intense price competition has eroded profits and revenue per user is one of the lowest in Europe.
Vodafone VOD.L is in talks with Swisscom over a potential deal to combine their respective Italian operations after the British telecoms company abandoned an approach to French low-cost operator Iliad.
A tie-up between Vodafone and Iliad would have been a better option from a “market repair” perspective, TIM’s Mr. Labriola said, adding that his company must be ready to play a role in consolidation once the sale of its network will be completed.
Mr. Labriola, who is seeking a second term at the head of the former telephone monopoly, is due to present a new three-year business plan for TIM on March 7
With its 24% stake, Vivendi could be the main obstacle to Mr. Labriola’s reappointment at TIM’s general meeting of shareholders scheduled for April.
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