Exclusive-KKR, Macquarie in Italy-backed talks over telecoms network commercial deal, sources say
Negotiations Over Italy's High-Speed Broadband Rollout
By Elvira Pollina and Giuseppe Fonte
MILAN, April 28 (Reuters) - The owners of Italian telecommunications companies FiberCop and Open Fiber are discussing the terms of a possible commercial deal to complete the country's high-speed broadband rollout, three sources close to the matter said.
Background and Key Players
FiberCop has the Italian government and U.S. fund KKR as its main investors, after in 2024 they partnered in a 19 billion euro ($22 billion) buyout from Telecom Italia which remains KKR's largest deal in Europe to date.
Italy and KKR have been at odds over Rome's push to merge FiberCop with rival Open Fiber, due to concerns over valuation and debt ratings.
Dispute Over State Aid
The dispute escalated in November when FiberCop filed a complaint with the European Commission, alleging that Italy provided state aid to smaller rival Open Fiber in breach of European Union competition rules.
Open Fiber is also controlled by Rome through state lender CDP, with Australia's Macquarie as a co-investor.
Current Talks and Government Involvement
The latest talks signal KKR's readiness to repair relations with Italy, after it clashed with Rome last year over FiberCop-Open Fiber merger plans.
The sources said Rome acknowledged that conditions are not currently in place for a merger.
Government-Sponsored Scheme
The economy ministry has urged instead FiberCop, Open Fiber and their respective shareholders to find alternative solutions to advance the broadband rollout without duplicating costly investments, the sources added.
Under the government-sponsored scheme being discussed, KKR-backed FiberCop would build fibre infrastructure in most of the areas, known as 'grey', which still lack ultra‑fast broadband but are not earmarked for public funding, one of the sources said.
KKR, Macquarie, CDP, FiberCop and Open Fiber all declined to comment.
Future Prospects and Potential IPO
IPO Considerations
FUTURE IPO
If pursued, the commercial deal could help the U.S. fund work towards a sale - slated at the earliest for 2028 - of part of its stake through an initial public offering, two of the people said.
Operational Arrangements
Under the scheme being discussed, Open Fiber would remain as the only full-fibre operator in subsidised remote areas and the two operators would grant each other access to their respective infrastructure, the sources said.
The two companies would remain direct competitors in the most profitable parts of the country where they already operate rival fibre networks.
Regulatory and Competitive Considerations
The sources cautioned that the scheme for an accord could still change and that an agreement could prompt antitrust regulators to impose measures to preserve competition in some of the targeted zones.
Market Share and Coverage
Italy owns directly 16% of FiberCop and 60% of Open Fiber through CDP.
Despite improvements in recent years, Italy still lags the European average in full‑fibre coverage, with around 70% of households passed.
Additional Information
($1 = 0.8520 euros)
(Reporting by Elvira Pollina and Giuseppe Fonte; Editing by Valentina Za and Keith Weir)
