TI splits fixed and mobile, inks Murdoch deal

Telecom Italia (TI) said it has approved a major reorganisation to split its fixed-line and mobile businesses into two new companies.

The reorganisation is designed, the company said Monday evening, to help it sharpen its focus on broadband and media activities both at home and across Europe.

Speculation has raged around whether the firm would, as part or the reorganisation, sell off of its mobile arm, TIM. On Sunday the Italian daily, Il Sole 24 Ore, said TI could raise Eur35bn if it sold its mobile unit and Eur6bn from its Brazilian arm. The sales, so the speculation goes, could ease the company’s Eur40bn debt.

TI also announced it had signed a media content deal with Rupert Murdoch’s Fox networks. TI is expected to now move ahead with a bold plan to deliver Murdoch’s products – starting with Fox content – across Italy and possibly Europe over broadband.

The firm also said net profits fell 15.7 per cent to Eur1.5bn ($1.78bn or £953m) in the first half of the year.

Telecom Italia bought the mobile business in 2005 having sold it off in the 1990s.

Chairman Marco Tronchetti Provera said TI had taken steps to split its mobile and fixed-line businesses to cut back on litigation and regulation covering Telecom Italia.

Other reports – mainly from Italy – suggest that rival European telecoms players as well as American private equity company The Carlyle Group, may be interested in buying TI’s mobile arm.