Telecom Italia desperately seeking new buyers

Telecom Italia is considering spinning off its fixed-line network into a new company to allow the entry of new investors able to support the multibillion euro investments needed to build up a next-generation network, a Dow Jones report said.

Italy's largest telecommunication operator, which is looking for fresh capital as it faces a €37 billion debt load, is also studying the sale of up to 5,000 of its mobile transmission towers in order to inject up to €2 billion in new funds, the report said.

The two strategic options could be discussed as soon as Telecom Italia's board meets September 25.

The network spinoff plan, however, may face the opposition of Telecom Italia's key foreign shareholder Telefonica, which has always opposed a corporate spinoff of the network, seen as a key strategic asset.

'The plan being studied sees a spinoff of Telecom Italia fixed-line network and the creation of a new company, to allow public or private investors injecting new funds in the creation of a next-generation network,' one of the sources said.

The head of Italy's regulator AGCOM said that Telecom Italia hasn't enough cash flow to invest in a next-generation network (NGN).

Spanish giant Telefonica could be allowed to participate in the new network company and invest fresh funds in the broadband project, one of the sources said.

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