AGCOM’s second market analysis of the year seeks to account for a major change in ownership of the country’s broadband infrastructure
AGCOM launches a new market review in light of TIM’s asset sale
On 11 September 2024, the Council of Italian communications regulator AGCOM voted four-to-one in favour of beginning a new full analysis of the country’s fixed network access markets. The review is considered necessary following the acquisition by Optics BidCo (controlled by US investment firm KKR) of the entire share capital of FiberCop, a company that comprises the fixed-line infrastructure and wholesale activities of former incumbent TIM. FiberCop was established in 2021 by TIM, KKR and Fastweb, initially to house and manage TIM’s secondary fixed-line network. TIM’s primary and backbone fixed-line network business was incorporated into FiberCop as part of the Optics BidCo deal. On 30 May 2024, the EC approved the transaction, concluding that it would raise no competition concerns in the European Economic Area (EEA).
The previous analysis of wholesale broadband access in Italy only concluded in April 2024
In launching the new review, AGCOM stated that it intends to assess the impacts of the structural separation of TIM’s fixed-line network on the regulatory obligations currently in place, as well as on the various markets connected to the access network. Ahead of issuing formal consultation, AGCOM will consider whether there is a need to impose, maintain, modify or remove any of those obligations. In a letter to the regulator, TIM argued that its position in the market does not warrant the same degree of regulation as before, stating it no longer owns a fixed network and therefore is only present at the retail level. Until the new review is completed, the existing regulatory framework for the five-year period covering 2024-2028 remains in force. The latest round of analysis – which was only completed in April of this year – sought to take into account market developments, including the growth in fibre coverage, which enabled AGCOM to identify certain parts of the country (e.g. Cagliari and Milan) as fully competitive and remove some obligations previously imposed on TIM. In the rest of Italy, AGCOM considered that TIM still had significant market power (SMP) and should remain subject to remedial measures.
The regulator may be inclined to remove some obligations on TIM following its structural separation
On 24 September, AGCOM launched a separate, short consultation on a precautionary measure relating to the suspension of obligations on TIM following the sale and transfer of the fixed network. In another letter to the regulator, TIM argued that its requirement to allow competitors to replicate its retail offers should no longer apply, reiterating the point that it ceases to be a vertically integrated operator. In “extraordinary circumstances”, AGCOM is empowered to step in to safeguard competition and protect the interests of end users and to adopt temporary precautionary measures that have immediate effect. The regulator considers that in order for a change to, or removal of, obligations on TIM to occur, it would be appropriate to offer stakeholders the opportunity to provide their views; however, with the urgent nature of the measure, the consultation window lasted just 15 days. While the regulator has provided no further details on a potential intervention at this stage, it may be minded to grant TIM’s request given that it has been presented with the master services agreement (MSA) that will govern the future relationship between FiberCop and TIM, while ensuring equivalent wholesale access for all providers downstream.
