ROME (Reuters) – Italy has told state-controlled utility Enel to reach a deal with Telecom Italia by the end of July on plans to create a single broadband network for the country, a person close to the matter told Reuters on Saturday.
FILE PHOTO: Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini/File Photo
In an effort to close its digital gap with the rest of Europe, Italy has been pushing for a unified network combining Telecom Italia’s (TIM) assets with those of Open Fiber, a wholesale-only operator owned by Enel and state lender Cassa Depositi e Prestiti (CDP).
TIM has been in talks for months over a merger of its fibre network assets with those of Open Fiber, but differences over issues such as governance and regulation have created a deadlock.
Economy Minister Roberto Gualtieri made the request for a memorandum of understanding to be signed by the end of the month at a meeting with Enel Chief Executive Francesco Starace late on Friday, the source, who asked not to be named because of the sensitivity of the matter, said.
The government has already been pushing Enel and TIM to join forces, but Gualtieri’s imposition of a deadline was the most concrete step so far to break the stalemate over the network expected to underpin the development of Italy’s digital economy.
“Rome is pushing for a memorandum of understanding by end-July,” said the source.
The economy ministry declined to comment. Enel declined to comment. TIM was not immediately available for comment.
Starace has said he does not oppose the idea of a single broadband network but has so far shown little enthusiasm for TIM’s proposals due to the differences over governance and regulation.
The former phone monopoly, which has both a retail and a wholesale arm, has repeatedly said it wants to keep control of any combined entity with Open Fiber.
That has complicated an agreement as European regulations favour the adoption of a wholesale-only business model outside TIM’s control.
People close to the issue told Reuters on Thursday the Treasury was prepared to take a more active role to promote a deal.
Reporting by Giuseppe Fonte, additional reporting by Elvira Pollina and Stephen Jewkes. Editing by Jane Merriman and Giselda Vagnoni