Italy’s PM tasks chief broadband strategy aide as bid for TIM network fails

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MILAN — Italian Prime Minister Giorgia Meloni has given one of his top aides the power to oversee Rome’s strategy on superfast broadband networks as the new right-wing government reviews plans for the biggest company telecommunications company, Telecom Italia (TIM).

Deputy Cabinet Secretary Alessio Butti will now be in charge of strategy, according to an executive order published by Reuters on Friday. Butti criticized the previous government’s plan to reduce TIM’s 25 billion euro ($26 billion) debt by selling its landline network.

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The sale is a key part of CEO Pietro Labriola’s strategy to dismantle and reorganize the battered business. State lender Cassa Depositi e Prestiti (CDP) has a deadline at the end of November to submit a preliminary offer for the fixed network, under a plan championed by Meloni’s predecessor, Mario Draghi.

The multibillion-euro offer would be part of a larger plan to merge TIM’s network with its smaller competitor, Open Fiber, which is controlled by CDP.

Butti criticized such an approach and called on CDP to take over TIM, whose stock is trading at historic lows, in a bid to combine network assets from the former telephone monopoly with those of Open Fiber.

Its so-called « Minerva » project also calls for TIM to sell its services business as well as its listed unit in Brazil to reduce its debt.

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The public lender is TIM’s second largest investor with a 10% stake. French media conglomerate Vivendi has a 24% stake.

CDP’s plan for TIM has also been complicated by valuation differences with Vivendi, which is demanding 31 billion euros to back a sale, at least 10 billion euros above the state lender’s price. indicated sources.

CDP is still aiming to submit a bid for TIM’s infrastructure by November 30 under a preliminary pact sealed in May, but has not yet received the green light from the government, four companies told Reuters on Friday. sources familiar with the matter.

Two of the sources said key government officials still had reservations about the CDP plan and as a result the lender could freeze the bid for the network.

Meloni’s office and the CDP declined to comment.

Economy Minister Giancarlo Giorgetti, who plays a key role in the sale, reaffirmed on Tuesday that the government wanted to take control of the TIM network, deemed to be of strategic interest, adding that such an objective could be achieved by « several ways ».

Earlier this month, Giorgetti warned that Butti’s plans for TIM needed to be widely discussed in government.

A meeting between the government and the unions, aimed at discussing the future of TIM, is scheduled for 28 November.

($1 = 0.9620 euros)

(Reporting by Elvira Pollina and Giuseppe Fonte; Editing by Lisa Shumaker and Clelia Oziel)