TIM's talkin' Italian with new fibre supply deal

TIM has awarded the first tender for last-mile fibre-optic cabling for its new FiberCorp unit to a quintet of domestic suppliers.

The Italian incumbent named Ecotel, Metallurgica Bresciana, Prysmian, Technikabel and Tratos as its first five suppliers, noting that each has committed to carrying out all parts of its contract at production and certification facilities and warehouses in Italy.

TIM did not disclose the value of the tender, but said the deals will serve FiberCorp’s needs for two years.

FiberCorp is the name TIM has given to its fixed access business, including its own FTTx operations and its FlashFiber joint venture with rival Fastweb. As has been well documented, TIM this summer agreed to sell a 37.5% stake in the unit to private equity firm KKR for €1.8 billion, and has also inked a deal that will see Tiscali invest in and use the network too. All this deal-making is the precursor to the creation of single access network in Italy, that will see FiberCorp merge with Open Fiber, the state-owned infrastructure company created by utility Enel and investment bank – and TIM shareholder – Cassa Depositi e Prestiti (CDP). TIM will control just over half of the new entity, dubbed AccessCo, but governance will be shared.

Enel’s participation in the project hangs in the balance. The firm reportedly looking to sell out, with Australia’s Macquarie having frequently been named as the most likely buyer. According to Italian financial daily Il Sole 24 Ore, a deal is imminent and will value Open Fiber at around €7.5 billion. Enel’s exit will smooth the way for the formal creation of the single network, which is due to happen in the first quarter of 2021, the paper notes.

In a separate report it shared details of FiberCorp’s plans to connect underserved areas of Italy; in a nutshell, it aims to start rolling out fibre in Q2, with a view to connecting 76% by 2025, while TIM will deploy fixed wireless access to the areas not covered by the FiberCorp plan in 2022, the paper said on Thursday.

And, as we have now learnt, that fibre will be supplied entirely by domestic companies.

“With this operation, TIM confirms its commitment in support of the country and its entrepreneurial fabric, with the aim of optimising the excellence and quality of Italian production to develop a strategic infrastructure for digitisation, which demands top performance and efficiency,” TIM said, in a statement.

Or to put it another way, we’re keeping it in the family.

Which might not be a bad move for a telco that still has some state control, is about to team up with a state-owned entity on a fibre access venture in which it was desperate to be the biggest shareholder, and has recently spent several years at loggerheads with the government over its ownership – remember the Vivendi debacle? – and various associated national security issues.

The single network plan and related fibre rollout goals are finally taking shape, and they’re very definitely Italian.