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Enel in no rush to sell stake in fast broadband unit Open Fiber

Published 2019-11-26, 11:28 a/m
Enel in no rush to sell stake in fast broadband unit Open Fiber

By Elvira Pollina and Stephen Jewkes

MILAN (Reuters) - Italy's Enel (MI:ENEI) said on Tuesday it was in no rush to sell its stake in fast broadband unit Open Fiber as phone incumbent Telecom Italia (MI:TLIT) presses ahead with plans to find a partner to fund a tie-up with its smaller rival.

"We are not in a hurry", Enel CEO Francesco Starace told reporters during the utility's capital market day in Milan, adding that it did not intend to walk out of the Open Fiber joint-venture.

Telecom Italia (TIM) is negotiating with Enel and state lender Cassa Depositi e Prestiti (CDP) on ways of integrating with Open Fiber to create a national fiber champion and avoid costly duplication of investment.

Open Fiber, a wholesale-only fast broadband operator, is jointly owned by Enel and CDP, which is also TIM's second-largest shareholder.

But Starace has so far shown little enthusiasm in parting ways with the fiber business.

"There is no tendency to walk out of the Open Fiber joint-venture ... it needs serious consideration," he said.

Besides regulatory issues, one stumbling block in the project has been how much Open Fiber is worth.

In a bid to bypass the obstacle, Telecom Italia is asking infrastructure funds to come up with bids for the assets of Open Fiber that will include its own last-mile network.

Enel values the business it set up in 2014 at up to 8 billion euros, while analysts estimates it could be worth somewhere in the range of 1.5-4.0 billion euros.

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"For us, Open Fiber is a big company that creates value," Starace said.

He said he had not sat down with any of the infrastructure funds sounded out by TIM.

According to a source close to the matter last week, 6 or 7 infrastructure funds had so far expressed an interest in teaming up with TIM in a possible investment in Open Fiber.

Telecom Italia was not immediately available for comment.

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