Telecom Italia puts wireline unit spinoff on hold

Telecom Italia is delaying plans to spin off its wireline network, a decision that drove its shares down 3.4 percent to €0.49 (64 cents) in Tuesday morning trading.

The telco's board of directors said on Monday that the draft decisions made by Italy's telecom regulator Agcom could affect its wireline network separation plan.

This delay is a setback for the service provider. A spinoff plan that was announced in May could have reduced its over €28 billion ($36.5 billion) debt. Earlier, it ended talks to acquire Hutchison Whampoa's wireless operator unit 3 Italia.

Analysts, according to a report in Reuters, said Telecom Italia is trying to put pressure on Agcom.

The Italian incumbent telco said a statement last week that the regulator's move to cut local loop unbundling (LLU) rates to €8.68 ($11.31) from €9.29 ($12.18) per line would have an economic impact on the company of around €110 million ($144 million).

Vodafone Italy, one of the incumbent telco's key wireline and wireless competitors, praised the lower LLU rates.

But as reported by FierceWirelessEurope, Telecom Italia said the ruling is contrary to guidelines from the European Commission, and is "in contrast to a strategy that, in recent years, has led to an alignment of the LLU fee of Telecom Italia to the weighted average of the major European countries (Germany, France, Spain and the UK), currently €9.29/month."

For more:
- Reuters has this article

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