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Troubled Telcom Italia hopes for government deal

by on16 July 2013

y analyst

Make us more viable

The Troubled Telecom Italia wants the government to improve its chances of getting a pile of investment dosh by giving it more advantages over any competition.

The outfit is widely seen as the sick network of Europe thanks to years of low investment in infrastructure.   It desperately needs to sell itself off, but it wants some “favourable regulatory conditions” before taking any steps forward in its plan to spin off its fixed-line network. The company's board acknowledged that the uncertainties introduced by recent decisions taken by regulators might affect the feasibility" of the spinoff.

Telecommunications regulator AGCOM on Thursday tentatively approved lower fees for rivals who rent space on Telecom Italia's fixed-line copper network, sparking criticism from Telecom Italia. Chairman Franco Bernabe's is not having much luck to revive the debt-laden outfit after the collapse of tie-up talks with Hutchison Whampoa.

Telecom Italia is sitting on more than $36.5 billion of debt and now any fee cut decided by the AGCOM jeopardizes the planned spinoff of the network and would reduce its annual income even more.

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