Telecom Italia in sharp decline in Piazza Affari in anticipation of the release of first quarter accounts that the CEO Luigi Gubitosi will present to the market on Tuesday and while the market fears that the negotiations with Open Fiber for the creation of a single fixed network have stalled. Stocks drop 2,6%, reaching 0,4511 euro, the lowest for five years.
Telecom Italia's board of directors meets on Monday afternoon to approve the numbers for the first three months of the year, numbers which the company's top management will illustrate to the financial community on Tuesday and which analysts' estimates see in sharp decline with a possible decline in the 6% on landline.
But what keeps the attention alive is also, or above all, the future of the Telecom network and the controversial merger project with Open Fiber. In particular, what has kept investors in suspense are the rumors published over the weekend by the Sole 24 Ore according to which the dialogue between the two companies has been interrupted for a couple of months. The last meeting to discuss possible integration options seems to have been close to the Telecom assembly of 29 March. The discussions would have stalled on the one hand on the perimeter of the confrontation and on the other on the problems to be faced in pursuing the hypothesis of complete integration. In practice, a merger between the Telecom network and that of Open Fiber should be accepted by all the shareholders of the two companies with those of Telecom intending to maintain control of the new entity. Among other possible obstacles there is also the Antitrust which could block the operation (or conditioning it to precise commitments) seeing in it a revival of the monopoly on the fixed network - no longer the copper one but the fiber one.
Finally, there is also the node of the so-called white areas (to market failure) where Open Fiber came out the winner of the Infratel tenders on condition of remaining an operator wholesale onlyunder penalty of losing the concession. According to Telecom, the issue could be resolved by keeping an ad hoc company alive, while Open Fiber has strong doubts about it.
Mediobanca, however, continues to believe that Telecom shares are worth buying (the judgment is Outperform with a price target of 0,76 euro). “2019 could finally be the year in which the project of a network company will be implemented,” commented the business gang adding that Telecom is likely to remain a major shareholder of the new single company. "A document on the operation could be the first step followed by a sale or quotation by Tim of a share of the network", added the Mediobanca analysts, revealing that they have developed a project that follows the Inwit model, the company of the towers of the Telecom group which in past years was listed on Piazza Affari.
The move, they argue, would allow Tim itself to reduce its debt. It would also make it possible to attract the interest of institutional investors, especially those focused on infrastructure. 'A joint effort on fiber development could speed up the process and save money. It would be good news for Telecom, Open Fiber and also for the country”, is the conclusion of the Mediobanca experts who see the network deal as an opportunity to create value.
Ma the political picture is more than ever uncertain and the government, a shareholder of Telercom Italia with almost 10% through CDP, on the eve of the 2019 European elections does not seem to have the strength to tackle such a delicate issue. We will talk about it again, if anything, after the elections.
