Telecom Italia's board has put its merger discussions with Hong Kong-based conglomerate Hutchison Whampoa on hold. The service provider, reports Reuters, said its board did not talk about a deal with Hutchison and that it will discuss the matter at "a future meeting."
Telecom Italia has not abandoned hopes of a possible merger with 3 Italia, but reports say a tie-up with Hutchison Whampoa looks increasingly unlikely.
Telecom Italia's move to spin off its wireline last mile network may enable it to raise money to invest in new network services and hasten broadband rollouts in the country, an analyst said.
Telecom Italia said its board has approved the plan to spin off the operator's fixed-line network into a separate entity, in what is being described as a landmark deal to raise funds for the debt-ridden company.
Telecom Italia has yet again postponed making a decision about whether or not to spin off its fixed-line network, as rumours continue to dog the operator about what it plans to do with its fixed and mobile assets.
Telecom Italia gave itself a month to decide on whether to move ahead with a possible tie-up with Hutchison Whampoa's 3 Italia, and also said it will make a decision on whether or not to spin off its fixed-line network on May 23.
Telecom Italia continues to be dogged by speculation about what it plans to do with its fixed network, although the operator has dismissed talk of a possible listing of the network as "premature," according to Reuters . In a separate development, rumours suggest Naguib Sawiris has expressed interest in re-entering the Italian telecoms market, five months after the failure of his bid for Telecom Italia.
European regulators plan to publish a blueprint for a single regional telecoms market in June and implement regulations before the end of the year, which is well ahead of original plans.
Deep-rooted political opposition looks set to be the first major obstacle to any potential deal between Telecom Italia and Hutchison Whampoa, as politicians and unions voice concerns over the strategic nature of the Italian operator's fixed-line network.
Telecom Italia said it will consider a proposed tie-up with Hutchison Whampoa, and noted that the Hong Kong-based group would want to be the main shareholder in any merger of its Italian mobile operations.