Telecom Italia wins EU reprieve over fixed-line fee cuts

Telecom Italia received some good news for a change this week after the European Commission raised questions about fee changes proposed by Italy's regulator that the operator said would cost it €110 million in lost revenue a year.

The struggling operator is trying to carve out a new path toward growth by first spinning off its fixed-line business and then turning its attention to its mobile operations. However, the spin-off plan was placed in jeopardy after Italian telecoms regulator Agcom approved lower fees for rivals who wanted to rent space on the incumbent's fixed network.

Telecom Italia said this would cost it €110 million in revenue a year, and it put its spin-off plan on hold until it received more favourable regulatory conditions.

However, the European Commission this week said it was concerned that Agcom had set prices based on a market review that was not the most recent. Access prices for broadband services should reflect the most recent information, the Commission added.

"In departing from the approach announced last year for setting access prices in the Italian broadband markets, Agcom undermines the required regulatory certainty for all market players," the European Union's digital commissioner, Neelie Kroes, said in a statement.

The European Commission said it and the Body of European Regulators for Electronic Communications (BEREC) will now discuss the matter with Agcom over the coming three months, effectively putting the order on hold for that period.

As Bloomberg noted, the development is a reprieve for Telecom Italia, which under Agcom's ruling would have to reduce the monthly fee it charges competitors to €8.68 from €9.28 per access line. Vodafone Italy and Wind Italy both rent network access from Telecom Italia. Vodafone Italia this month said it is seeking more than €1 billion in damages from Telecom Italia for allegedly abusing its dominant position

Agcom told Bloomberg that it reiterated "the validity of our proposals, especially for the cut of grid-access fees."

For more:
- see this Reuters article
- see this Bloomberg article

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