James Middleton

September 14, 2006

1 Min Read
Update: more details on TI reorganisation

General Electric, Time Warner and Rupert Murdoch’s News Corp. have all emerged as potential players in Telecom Italia’s proposed spin off of its mobile operation.

The news emerged Wednesday, when Prime Minister Romano Prodi’s office released details of a meeting between Telecom Italia head Marco Tronchetti Provera and Prodi. The Italian government is reportedly outraged over the plans, which could see the mobile operator fall into the hands of foreign investors.

Prodi is understood to have been unaware of Tronchetti’s plans to spin off Telecom Italia Mobile (TIM), in a move that speculation suggests could precede the sale of part or all of TIM for around Eur35bn.

The reorganisation is designed, the company said, to help it sharpen its focus on broadband and media activities both at home and across Europe.

But in light of the news, Thomas Husson, analyst with Jupiter Research, questions whether TIM was a large enough player to compete in a consolidating industry anyway. TIM has more than 29 million lines in Italy, giving it 40 per cent market share and is number two in Brazil with 22 million lines. “But after several significant acquisitions [in the market, such as O2 and Amena], it sounds like it now has a lower profile than China Unicom, Vodafone, Telefonica, TeliaSonera, T-Mobile or Orange to compete at an international level,” Husson said.

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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