Telecom Italia (TIM) CEO Amos Genish said the mobile operator is keen to combining the Italian phone group’s fiber-to-the-home (FTTH) broadband assets with those of smaller rival Open Fiber.
TIM has spoken about the idea to the shareholders of Open Fiber, which is jointly owned by state lender Cassa Depositi e Prestiti (CDP) and state-controlled utility Enel.
Open Fiber said it was “open to cooperate with anyone who can add value to its fiber optic investments”.
TIM’s idea is that the combined FTTH entity could gain a regulated asset base (RAB) status. A RAB-based scheme allows operators to get regulated returns on investments they make in the infrastructure on top of fixed tariffs, Reuters reported.
TIM is not interested in combining its entire network infrastructure with Open Fiber, partly because the chance of that larger entity getting RAB status is very low.
TIM is in the process of putting its network infrastructure into a separate company (NetCo) controlled by TIM. Next year, the group will evaluate further options for NetCo, including a potential stake sale and listing.
Amos Genish said TIM will return to an investment grade rating next year, which would pave the way for the former state monopoly to resume dividends payments, last handed out in 2012.
Amos Genish said he was committed to TIM’s strategy to 2020, dismissing suggestions he could leave early following a reshuffle after activist fund Elliott wrestled board control from top shareholder Vivendi.
Mobile rival Iliad last month launched its mobile services in Italy. Amos Genish said the French telecom operator’s low-priced offer was “aggressive”, but “not disruptive”, and TIM’s position remained solid.
He added TIM was seeking clarity from authorities on whether Iliad’s move to sell SIM cards via automatic sales machines violated a law that requires the identity of a person buying a SIM card to be verified by an authorized official. If the practice is legal, TIM would probably adopt the same method to cut costs.
