Telecom Italia looks at network split

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Telecom Italia approves proposal to consider plan to separate access network into a new company with state investment

The board of directors of Telecom Italia has given the management its approval to explore splitting off its access network into a separate company with state investment.

Under the proposed scheme, Cassa Depositi e Prestiti, a state-controlled savings bank, would invest in the access network company, which is being called Newco. The company would also offer access services to other companies in the Italian market, including Vodafone and Swisscom’s Fastweb.

A board meeting in Milan, chaired by Telecom Italia executive chairman Franco Bernabè, decided to allow the management team to “to further investigate the conditions for the possible participation of Cassa Depositi e Prestiti in the capital of a company to be created to manage the access network.

The company gave no further details of the proposed structure of the access company, which is expected to be able to function in a similar way to Chorus, split off from Telecom New Zealand in 2012, or Openreach, BT’s independently managed local access operator.

The Italian government owns 70% of CDP and the rest is owned by financial institutions.

Meanwhile the same board meeting decided to shun Naguib Sawiris, the Egyptian businessman who has been indicating his wish to invest up to €3 billion in Telecom Italia. “Following the evaluations carried out the board has decided not to proceed further,” said a Telecom Italia statement. Sawiris owned rival Italian operator Wind until he sold that to VimpelCom in 2011.

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