Telecom Italia SpA (BIT:TIT) said its board had decided to halt the implementation of the plan to spin off the fixed-line business until favourable regulatory conditions are in place.
Italy’s telecom regulator AGCOM provisionally approved last week lower charges for competitors to rent space on the operator’s fixed-line copper network.
Telecom Italia has said that such a move by the regulator puts the spin-off at risk. Slashing the fees would reduce the value of the fixed network and thus potentially lower the attractiveness of the new firm to investors, Reuters notes.
Reuters reported earlier, quoting a source in the know, that Telecom Italia might drop the spin-off plan in the wake of the regulatory development.
Telecom Italia’s board gave the green light to the spin-off in May. Under the plan, the separation will involve the creation of a new company that will hold the network and will be 100% owned by Telecom Italia.
Italian state-backed financing institution Cassa Depositi e Prestiti SpA (CDP) has been in discussions with Telecom Italia to acquire an interest in the new entity for months. The telecom operator’s chairman Franco Bernabe said in May the group could sell a minority stake in the network to CDP, while keeping a majority interest.