Telecom Italia gives more thought to spinning off wireline network

Telecom Italia (NYSE: TI) COO Marco Patuano said on Friday that spinning out wireline network is an “interesting” idea, while confirming that it is conducting discussions with a state-backed financing body to collaborate on new broadband projects.

“There is a dialogue that continues,” Patuano said in a Reuters article. “The possible separation of the access network into another company is an option that both (Telecom and Cassa Depositi e Prestiti) are looking at with interest.”

News of a potential spinoff should be of no surprise as Franco Bernabe, Telecom Italia’s CEO, who said in April it was considering spinning off its wireline network as a way to pay down debt and expand its investments in its own nationwide FTTH network.

TI’s network, according to the Reuters report, is worth about €9-€15 billion ($11.6-$19.4 billion).

Patuano’s statement comes on the heels of an agreement Telecom Italia signed with Swisscom’s Fastweb just last week to build a hybrid fiber/copper Fiber to the Cabinet (FTTC) network to bring higher speed broadband services to more premises throughout Italy.

Fastweb’s Swisscom dedicated €400 million ($516.8 million) to fund the FTTC project, which it said will bring broadband services 20 percent of Italian homes.

Under the terms of the agreement, Fastweb will build out fiber connections to each cabinet and then use VDSL to deliver services to homes and businesses via Telecom Italia’s copper network infrastructure.

Because the new FTTC network is being built as an open access network, other interested service providers could participate.

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