MILAN, July 15 Telecom Italia said on
Monday it wanted to secure favorable regulatory conditions
before taking any steps forward in its plan to spin off its
fixed-line network after the local regulator cut tariffs its
rivals pay to access the grid.
"The company's board acknowledged that the uncertainties
introduced by recent decisions taken by AGCOM might affect the
feasibility" of the spinoff, the Italian phone company said in a
statement late on Monday following an extraordinary board
Telecommunications regulator AGCOM on Thursday tentatively
approved lower fees for rivals who rent space on Telecom
Italia's fixed-line copper network, sparking criticism from
Telecom Italia, but plaudits from competitors like Vodafone
which does not own fixed lines.
Telecom Italia was pondering its options, including whether
to halt the spinoff, a source familiar with the matter told
Reuters on Monday.
A failure for the project would be another setback for
Chairman Franco Bernabe's efforts to revive the debt-laden
group, following the collapse earlier this month of tie-up talks
with Hutchison Whampoa.
Telecom Italia's board in May approved a plan to separate
fixed-line access assets into a new company, a move that could
free up resources to cut its more than 28 billion euros ($36.5
billion) of debt.
The project would take several months to complete, the
company said at the time.
Telecom Italia has said the fee cut decided by the AGCOM
jeopardizes the planned spinoff of the network and would reduce
its annual income by 110 million euros.
AGCOM plans to reduce the local loop unbundling (LLU) fees
by 6.5 percent to 8.68 euros ahead of a broader regulatory
review for the three years to 2016.
The ruling will be reviewed by European authorities and
AGCOM will take a final decision well before the end of the
Lower line rental charges would diminish the value of the
Telecom Italia's fixed network, making the new company to be
spun off potentially less attractive to outside investors.
Italy's state-backed investment arm, the CDP, has been in
talks with Telecom Italia for months over taking a stake in the