Telecom Italia SpA’s chief executive officer said his group is ready to play an active role in any consolidation of Italy’s telecommunications sector, as the carrier prepares for a landmark network selloff which will radically alter its business model.
Mergers and acquistions are “on the radar” for the carrier, CEO Pietro Labriola told Bloomberg Television’s Francine Lacqua on Tuesday, and the company is on the lookout for options for its consumer unit, where it “would be a buyer, not a seller.”
Telecom Italia earlier this month agreed to sell its landline network — the carrier’s most valuable asset — to US private equity firm KKR & Co. for as much as €22 billion ($24 billion), moving ahead with a strategic shakeup it’s been weighing for over 15 years.
Once the network is divested, the only way forward for the Italian sector is through consolidation, Labriola said.
The CEO noted that Europe has “hundreds” of telecoms players, compared with far smaller numbers in North American and Asian markets.
Italy is an extreme case even for Europe, with one of the world’s most competitive telecoms markets. Monthly subscriptions for full-fiber landline services, which usually include unlimited Internet, priced as low as €20 to €25, about a quarter of what most US consumers pay.
And competition has only grown more intense in recent years as new players continue to appear — notably France’s Iliad SA, which entered the country in 2018, positioning itself as a cutthroat, no-frills specialist and sparking a price war.
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Still, Labriola’s strategy has not gone uncontested. The decision earlier this month by the carrier’s board to move ahead with the network sale marks a direct challenge to Vivendi SE, the firm’s largest investor. The French media group has consistently said Telecom Italia should seek about €30 billion for the network.
Milan-based Telecom Italia has remained in steady contact with Vivendi in recent months, Labriola said, but it remains convinced that there’s no any alternative to a network sale. The CEO also said the carrier will continue to be a listed company.