Daniel Dal ZennaroANSA
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On the first day of trading after the expression of interest in Tim from the American fund Kkr, the stock of the former telecommunications monopolist returned to June values, closing the day with a brilliant + 30%. A signal that the market has welcomed the possibility of a possible takeover bid on Tim. “But to give an exhaustive judgment of the affair it is premature, we must first understand a series of details. At the moment we still know too little. The important thing is that whoever will manage the network is truly an independent operator, ”Alfonso Fuggetta, professor at the Milan Polytechnic and CEO of Cefriel, told HuffPost.
The American fund Kohlberg Kravis Roberts presented a non-binding expression of interest for Tim, with a proposal, at the moment indicative, of a takeover bid of € 0.505 per share. It means valuing the company eleven billion euros, or 45% more than the capitalization at the close of the stock market last Friday. It is good news?
It is necessary and necessary to exercise caution because there are still many things that we do not know. The terms of the offer, for example, or what aims he intends to pursue, how he plans to approach a series of critical issues that Tim has been dragging on for some time. Clearly it is to be positively assessed that a foreign subject wishes to invest a significant amount of billions in our country. However, there is a series of knots linked to all the Telecom events that we have come to know in the last fifteen years. For now we can imagine that the interest of the American fund is due to the desire to revive the telephone company. But a real judgment can only be given when the terms of the agreement, the governance of the company and who will lead it are clear.
After the expression of interest from the American fund, politics reacted by appealing to the Government to quickly clarify the operation. Among the various assets of Tim, the most sensitive for the parties is certainly the ownership of the network, it is no coincidence that for some time there has been talk of a possible spin-off …
In my opinion, there is first and foremost a question of competition. Whoever manages the infrastructure must be independent from the retail operators who offer the telecommunication services.
Does it have to be a public entity?
It can also be a private entity or a private majority. The theme is how the network operators – given that we currently have two, Tim and Open Fiber – rank with respect to retail operators. For example, we know how Open Fiber operates: it manages the infrastructure and leases it to operators. It is neutral. Tim, on the other hand, is an already integrated company. It has infrastructure and offers services. And it is necessary to understand with the new company FiberCop (supplier of access services on the last mile of the fiber network, already participated by Kkr, ed) what will be the links between the operator and third-party companies that offer tlc services. The issue is not so much whether the nature of the manager must be public or private, but the corporate independence between the various actors involved, between the network and services.
Today, he recalled, there are two network operators: Tim and Open Fiber. For some time there has been talk of a possible integration into a single network, a project which, however, is struggling to take off. What are the difficulties?
Open Fiber is an all-fiber network and therefore has a topology designed exclusively for fiber. Tim’s is a mixed network, often with the fiber from the control panel to the cabinet (the cabinet) and then the copper cables to the houses. However, it is an infrastructure that follows the old copper network. The two networks do not have the same topology or the same structure. It is therefore not a question of simply removing the copper and replacing it with fiber. This is a technical problem: if you want to follow the path of a single network, you have to rethink the entire overall structure.
For the national and European competition authorities, the preferable route for managing the infrastructure is that of a pure network operator, not vertically integrated in the provision of services to end users.
This is a hypothesis that I too had espoused in the past: a wholesale network operator and many retail service operators. In reality, there may also be more wholesale operators, but for there to be competition there must be no vertical integration or, alternatively, there must be no dominant positions. This is established by the EU antitrust rules. If there is an entity active in the services who also owns the network, the risk is that there is no guarantee for the other retail operators.
What is the state of the art regarding the fiber optic network in Italy?
Open fiber certainly gave a shock. If we look at the European Commission’s Digital Economy and Society Index (DESI), we see that in some areas, and I am referring to connectivity, Italy has made progress. There is a change of pace, unlike in other areas. Many areas have been wired but in the last year we have slowed down, also due to the pandemic. And the usual knots remain to be resolved.
Knots that Tim has been dragging on for years …
The history of Telecom is troubled and characterized by a long series of changes of hands that have complicated the situation of the incumbent and contributed to aggravate the heavy debt position of the company. Having a new network market, and it is true for Tim as for any other incumbent, means having to change the organization, management models, governance systems. Between Pnrr and new operators who want to invest in Italy, it could be an opportunity to make that leap in quality that we have been waiting for for some time.
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