Telecom Italia reportedly mulling reorganization on antitrust fears

Italian telco Telecom Italia is considering a change to the structure of its business in order to avoid antitrust charges of up to €4 billion, according to a Bloomberg report.

The specific concern appears to involve Open Access, as division of TI that manages wholesale access to its fixed network. It seems the company is facing similar claims to those directed at BT in the UK, that it is somehow deficient in its service to other CSPs. BT faces the possibility of being forced to offload Openreach and, if Bloomberg’s sources are correct, TI is acting to pre-empt a similar situation in Italy.

The analyst consensus of TI’s impending Q2 financials includes a one-off provision of over €300 million which seems to cover both existing and anticipated antitrust charges, at least some of which involve the Open Access issue. It is thought that civil damages claims could follow amounting to billions of euros.

One public antitrust fine concerns obstruction of access to the wholesale network in 2009-11. If the civil claims indicated in the report also concern alleged historical abuses it’s not immediately obvious how creating an Openreach-style now will solve the problem, especially as that structure hasn’t made the issue go away for BT.

In related news Reuters is reporting that the talks between Hutchison Whampoa and Vimpelcom to merge TI rivals 3 Italia and WIND are close to reaching a positive conclusion. If they do come to an agreement, the move would still have to be approved by the Italian authorities. Ironically this could help TI in its antitrust struggles as the merger would create a bigger domestic competitor.

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