ROME (Reuters) – Italy’s single broadband network operator cannot be controlled by a majority shareholder, the deputy industry minister said on Friday after Telecom Italia (TIM) <TLIT.MI> said it would not accept less than 50% of any network.
The Italian government is trying to negotiate a deal between the phone group and Open Fiber, which is jointly owned by state lender CDP and utility Enel <ENEI.MI>, to merge fibre assets and create a single national champion.
However, progress has been delayed as it seeks solutions over governance and regulation issues.
“Under a regulatory and antitrust profile, a single network company that supplies wholesale access services to all operators cannot be in the hands of a single, vertically integrated majority shareholder, ” Stefano Buffagni told daily newspaper la Repubblica.
He had been asked about TIM wanting to remain as majority shareholder of any future network.
TIM, which has both retail and wholesale arms, has repeatedly said it wants to keep control of any merged entity with Open Fiber, while European regulations favour the adoption of a non-vertically integrated model outside TIM’s control.
On Thursday Chief Executive Luigi Gubitosi reiterated the group’s desire to hold the majority of the capital but was flexible on governance issues.
“Today, all of our most sensitive data runs on that network and the competitiveness of our companies (depends on it),” Buffagni said.
The minister added that Italy could use the European Recovery Fund for the single-network project, but only if the system as a whole were to benefit from the funds rather than a single company.
Buffagni said he was in favour of a previous TIM project to split off its network business, controlled either by the state or a newly floated company.
“If well implemented, it would be able to create value for all; shareholders, too. It would be good for the country as well as the company … and the vertical integration would disappear,” he added.
(This story corrects typographical error in headline)
(Reporting by Giulia Segreti; Editing by Clarence Fernandez and David Goodman)