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Headlines

Italy in standoff with KKR over telecom network

Published by Global Banking and Finance Review

Posted on October 13, 2025

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By Giuseppe Fonte and Elvira Pollina

ROME/MILAN (Reuters) -Italy is at loggerheads with U.S. investment firm KKR over the future of the state-backed firm which manages the country's main telecom network, four sources close to the matter told Reuters.

KKR and Italy's Treasury finalised a 19 billion euro ($22 billion) deal last year to buy landline network operator FiberCop from Telecom Italia (TIM). The transaction helped TIM to cut its debt by 14 billion euros.

Tension between KKR and the government centre on Italy's push for a tie-up between FiberCop and smaller rival Open Fiber, which is controlled by state lender Cassa Depositi e Prestiti (CDP) and Australia's Macquarie.

KKR declined to comment.

Rome sees a combination of the two ventures into a unified, wholesale-only broadband network under state oversight as a way to avoid duplication of heavy investments and reduce the lag with European peers in high-speed fixed-line internet coverage.

Only about 70% of Italian households have access to ultra-fast broadband, against an EU average of 82%.

KKR, FiberCop's single largest investor with a 37.5% stake, expressed reservations about the merger, frustrating Italian government attempts to broker a comprehensive deal, said the sources.

ULTRA-FAST BROADBAND

KKR's concerns include valuation as well as risks that the merger could result in a prolonged antitrust review, delaying its investment plans and potentially worsening its credit ratings, one of the sources said.

Rome is working to overcome differences, believing there are no insurmountable obstacles to the agreement or relevant antitrust issues, a Treasury official said.

Another factor causing tension is the EU-funded 3.4 billion euro plan to provide broadband to over 3 million buildings, the sources said. Progress has lagged, with Open Fiber falling behind FiberCop.

Rome has proposed cutting the number of buildings Open Fiber has to connect by around 700,000, in response to difficulties in meeting a June 2026 deadline, partly due to errors in mapping the buildings scheduled for cabling.

FiberCop had sought to take over the work assigned to its rival in response to Open Fiber's delays, but parties have failed to reach a deal.

KKR's representatives have argued in talks with government officials that the terms of the revision of the fibre rollout plan amounted to unfair aid for Open Fiber, said the sources, who all declined to be named due to the sensitivity of the matter.

Open Fiber, Macquarie, CDP and FiberCop declined comment.

FiberCop is also dragging its feet over a 500 million euro commercial deal to buy capacity from Open Fiber in the most populated areas of the country, one of the people said.

($1 = 0.8623 euros)

(Editing by Valentina Za and Alexander Smith)