Telecom Italia appoints Morgan Stanley to help spin off wireline network
Telecom Italia (NYSE: TI) is seeking the help of Morgan Stanley on finding the best method to spin off its wireline network in an effort to raise more capital for the company and fund its FTTx projects.
Citing a person close to the situation, Bloomberg reports that Morgan Stanley is talking with Italy's state-run Cassa Depositi e Prestiti (CDP) SpA, which could buy a piece of the network.
A separate report by Reuters issued earlier this month revealed that it would consider selling a piece of the network, while rejecting a proposal by Egyptian tycoon Naguib Sawiris.
Even though a potential wireline network spinoff would enable it to turn more of its attention to building out more profitable wireless data services, TI isn't turning its back on wireline broadband, building out FTTH and Fiber to the Cabinet (FTTC) networks.
Complementing its FTTC efforts, Telecom Italia is jointly building out the network with FastWeb, which is owned by Switzerland's incumbent telco Swisscom.
Interestingly, TI's wireline broadband investments come at a time when Italy's parliament passed legislation known as Growth 2.0 to implement the EU's Digital Agenda. Part of this bill includes €750 million ($988 million) to expand broadband access in underserved areas.
Regardless of the progress TI has made in rolling out FTTC and FTTH services, it still trails other countries such as Lithuania and Norway, which according to the FTTH Council Europe have reached over 30 and 18 percent penetration, respectively, with FTTH.
Telecom Italia gives more thought to spinning off wireline network
Telecom Italia brings FTTC network to more cities
Major shareholder pressures Telecom Italia to spin off wireline network