Italian communications regulator Agcom has announced that it’s essentially opposed to the initial plan submitted by Telecom Italia (TIM) to spin off its fixed access network into a fully controlled separate company. In a lengthy document published on its website, Agcom stopped short of rejecting TIM’s proposal to legally separate its network into a new entity (Netco) but said the separation would allow it to retain significant market power in that it could continue favouring its own companies to the detriment of competitors.
It would also benefit from "a significant competitive advantage" in all of Italy apart from Milan where rival operators have already rolled out extensive networks, added Agcom. The watchdog said it was now launching another 45-day public consultation on its latest assessment, the results of which would allow it to reach a final decision on the proposal in the coming months.
TIM’s plan to set up Netco was finally revealed by former CEO Amos Genish in March 2018 in response to concerns from the Italian government, competitors and regulators. However, trade unions subsequently warned that the plan could result in the transfer of around 30,000 TIM staff to Netco, putting at risk some 20,000 jobs.
US activist investor Elliott Management, which seized control of the operator’s board from leading shareholder Vivendi last May, has pushed strongly for the spin off of Netco, which is said to be worth up to EUR 15 billion.
