TIM and Open Fiber Plan Merger to Create Italy’s Single Broadband Network Champion

TIM has announced plans to merge its fixed network with rival Open Fiber, a broadband company controlled by CDP, in an effort to revive the company’s fortunes. Pietro Labriola, CEO of TIM, is spearheading the move to completely separate TIM’s landline grid from its service operations. CDP, TIM’s second-largest investor with a 10% stake in the company, also owns 60% of Open Fiber and will control the merged network. The firms aim to negotiate a binding agreement by the end of October.

The preliminary agreement was signed by global infrastructure funds KKR and Macquarie, both of which hold minority stakes in TIM’s last-mile network unit and Open Fiber. Despite the merger, both funds will remain minority investors in the single network entity. KKR joined the project after TIM rejected a €10.8 billion ($12 billion) proposal by the American fund to take control of TIM and delist it before splitting its services and fixed assets.

The Italian government hopes to establish a single broadband network to avoid duplicating investments and accelerate the rollout of fiber optic and digitalization across the country’s economy. The merger of TIM and Open Fiber is a significant step towards this goal.