Italian state lender CDP and Telecom India (TIM) said they had signed a preliminary agreement to pave the road to a single broadband network as its former phone monopoly works to spread its landline grid.
The plan aims to combine TIM’s fixed network with CDP-controlled broadband rival Open Fiber as Pietro Labriola, CEO of TIM, looks to revive TIM’s fortunes via a complete split of its landline grid from service operations.
TIM’s second-largest investor, with a 10% stake in the firm, is CDP. The state entity also owns 60% of Open Fiber and will control the combined network. The statement from the firm also added that the parties aim to negotiate a binding agreement by the end of October.
The much-awaited preliminary agreement was signed by global infrastructure funds KKR and Macquarie, which hold minority stakes in TIM’s last-mile network unit and Open Fiber.
Both international funds will remain minority investors in the single network entity.
KKR joined the TIM-CDP project after TIM spurned a 10.8 billion euro ($12 billion) proposal by the American fund to gain control of TIM and delist it before splitting its services and fixed assets.
Italy is keen to establish a single broadband network champion to avoid duplicating investments and speed up a fibre optic roll-out and digitalization of the country’s economy.