Telecom Italia cannot control a single broadband network: minister

ROME (Reuters) – Italy’s only broadband operator cannot be controlled by a majority shareholder, the deputy industry minister said on Friday after Telecom Italia (TIM) stated that he would not accept less than a 50% stake in any network.

The Italian government is trying to broker a deal between the phone group and Open Fiber, which is jointly owned by state lender CDP and utility Enel to combine fiber assets and create one national leader.

However, progress has been delayed as solutions to governance and regulatory challenges are sought.

“According to the regulatory and antitrust profile, a single network company that provides wholesale access services to all operators cannot be in the hands of a single, vertically integrated majority shareholder,” Stefano Buffagni told la Repubblica.

He was asked whether TIM wants to remain the majority shareholder in the future network.

TIM, which has both retail and wholesale operations, has repeatedly said it wants to retain control of any entity merged with Open Fiber, while European regulations favour the adoption of a non-vertically integrated model outside TIM’s control.

On Thursday, CEO Luigi Gubitosi reiterated that the group wanted to own the majority of the capital but was flexible on governance.

“Today, all of our most sensitive data flows through this network and the competitiveness of our companies (depends on it),” Buffagni said.

The minister added that Italy could benefit from European Recovery Fund funding for a single grid project, but only if the funds were used by the entire system and not just a single company.

Buffagni said he was in favour of TIM’s previous project, which involved separating the company’s network business, controlled either by the state or by a newly listed company.

“If it is implemented well, it will be able to create value for everyone; shareholders as well. It will be good for the country as well as the company… and vertical integration will disappear,” he added.

(This article corrected a typographical error in the headline)

(Reporting by Giulia Segreti; Editing by Clarence Fernandez and David Goodman)