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Telecom Italia finally green-lights its fixed-line spinoff

As the incumbent gets ready to shed its fixed-line business, a number of discussions on its future are set to resume.
Written by Cristina Prina Ricotti, Contributor

Telecom Italia will now go ahead with the spinoff of its fixed-line network, the company announced on Thursday afternoon.

Telefonica, the Spain-based telco and one of Telecom Italia's major shareholders, did not take part in the vote on whether to green-light the spinoff, despite rumours in recent days indicating that it would vote against the move.

The fixed-line unit, informally known as Opac (short for open access), is not expected to be created for at least another 18 months.

Once it's up and running, it will guarantee what is known as "equivalence of input" — that is, all of its wholesale customers will get access to the same products at the same prices and under the same conditions. The new company will offer all operators products including local loop unbundling (LLU) and virtual unbundling local access (VULA) for its next generation networks.

The Italian communications regulator Agcom will begin evaluating the spinoff from Friday, while Telecom Italia is to resume talks with banking group Cassa Depositi e Prestiti, which has previously expressed an interest in taking a minority share of the fixed-line company once it's separated from Telecom Italia.

The planned agreement with Cassa Depositi e Prestiti is not seen as a positive development by some of the Italian media, however. According to daily newspaper Il Fatto Quotidiano, the Cassa Depositi e Prestiti will carry part of the burden of Opac's copper network, which is valued between €8bn and €16bn and will soon be outpaced thanks to plans for a massive investment in Italy's fibre broadband.

Opac will be part of public-private company that will most likely carry large fixed costs that will need to be financed through traditional means: an increased in wholesale rates that will in turn justify telcos raising retail prices — to the detriment of Italian consumers.

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