MILAN (Reuters) - Telecom Italia has signed a non-disclosure agreement with state lender CDP and utility Enel to kick off talks on ways of integrating its fiber optic network with that of smaller rival Open Fiber, including a possible merger.
“The objective of the discussions is to verify the feasibility of such operation... based on the will of the parties and on the legislative and regulatory frameworks,” TIM said in a statement.
The Italian government is pushing to create a single ultrafast broadband operator by merging TIM’s network with Open Fiber to avoid duplicating costly investments.
Cassa Depositi e Prestiti (CDP), which jointly owns Open Fiber alongside state-controlled Enel, has built a stake of just under 10% in TIM to become its second-biggest shareholder after Vivendi.
But the future of TIM’s network has become a key bone of contention between the French media giant and activist fund Elliott, which last year seized control of the group’s board.
Open Fiber, set up by Enel in 2016, is a fiber-only infrastructure company while TIM’s network is made up of fiber and copper wire.
TIM’s Chief Executive Luigi Gubitosi said earlier this year merging Open Fiber with TIM’s networks would be positive for both companies, adding TIM would maintain some kind of control of the new network entity.
Reporting by Stephen Jewkes; Editing by Jan Harvey