Telecom Italia is abandoning plans to spin out its wireline network operations, according to a Bloomberg report citing people close to the company's activities. The service provider will officially withdraw the plan during an upcoming board meeting on Nov. 7.
The plan received approval from the company's board in May.
The service provider was going to use the network sale as a way to pay down debt and get more regulatory freedom. This plan could have reduced the telco's €28 billion ($36.5 billion) debt load. Earlier, it ended talks to acquire Hutchison Whampoa's wireless operator unit 3 Italia.
Telecom Italia decided to delay the network spinoff in July after Agcom, Italy's telecom regulator, mandated it had to reduce the wholesale rates it charges to competitors that use its last mile networks.
Since the spinoff was put on hold, the telco has been in a continual state of flux.
Earlier this month, Franco Bernabe, CEO of Telecom Italia, announced his resignation during a board meeting after clashing with the board over the company's direction. He was replaced by COO Marco Patuano, who will present a new turnaround plan for the service provider at its upcoming board meeting.
As a result of Bernabe's resignation, Standard & Poor's cut the carrier's debt rating to junk. It cited uncertainty over its ability to realign its balance sheet to offset declining revenues and earnings in Italy.
- Bloomberg has this article
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