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TIM reviews fixed-line spin-off options

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Telecom Italia has announced it will start reviewing a potential spin-off of its fixed-line business to address concerns of the Italian government and offer more freedom in the content game.

The statement follows a board meeting called to discuss the 2018-2020 Business Plan and approve the 2018 preliminary budget. As the network is classed as a national interest, the government has been peeking into dark corners of TIM, which might not be appreciated by stakeholders who just want to make a bit of money.

“Over the coming months, the management will continue to examine various hypothesis to establish whether network separation is needed to address Institutions input and to unlock value,” TIM said in a statement.

Reading between the lines, some might assume this move is an effort to keep the Italian government at arm’s length. With Vivendi exerting more control over operations at the TIM, government officials have started getting twitchy over its critical infrastructure. Of course, who would want to be thinking about such trivial matters over a long-lunch. Politicians need to be able to appreciate fine food without being bothered by something like running the country.

By separating the two organizations, Vivendi TIM might have more freedom to explore new revenue streams, potentially righting the wrong of connectivity commoditization. The Italian government has been nudging the business along this route for some time, though whether this accelerates upgrade plans remains to be seen. Perhaps the fixed-line business will simply become the ugly sister of the Vivendi TIM family.

That said, this could also be viewed as a stalling tactic, appeasing a government which has proved complicated, until elections next May. It is believed the elections will bring about a change in government, therefore a cynic might question whether there is any intention to separate the two business units, but Vivendi TIM is simply hoping for a more ‘co-operative’ administration.

On the other hand, Vivendi TIM considerations might be genuine, and the country could be heading down to the same set up as we have in the UK with BT and Openreach. And we all know how well that has been working out recently.

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