On 6 March 2018, Telecom Italia (TIM)’s board approved a plan to move the company’s fixed network assets into a legally separated entity, which will still be part of the group and will be 100% controlled by TIM. According to the plan, access to the network will be granted through a ‘one-stop-shop’ access point for regulated and unregulated wholesale services for all operators including TIM, delivering a 'fully neutral and equivalent' model.
Several factors contribute to TIM’s decision. It is perhaps striking that, despite the currently changing political landscape in the country, the board decided to approve the plan without waiting for a new government to take power. On the one hand, this is because nearly all the main political parties in Italy have taken the stance of the need to have a separated fixed network, which means that political pressure for this to happen would have likely continued under the new parliament. On the other, the market in Italy is evolving in such a way, that it is now a good time for TIM to make the spin-off.
In particular, the rise of wholesale-only provider Open Fiber has, for the first time since the liberalisation of Italy’s telecoms market, put significant pressure on TIM’s future wholesale revenues, currently around €2bn per year and forecast to decline by about a third by 2022. Alternative operators quickly warmed to Open Fiber’s arrival on the market, which is now starting to give them an alternative to TIM’s network. For years, these operators have raised concerns about access conditions and TIM’s way to satisfy their access requests.
For now, it is hard to make predictions about ownership of the network. TIM will be the sole owner for the time being, though political pressure and changes in market conditions could result in new investors (both private and public) coming into the netco. It will take at least one year before things become clearer on this front.
