13 September 2006

Selling Tim

In 2005 Telecom Italia announced a merger with TIM. The operation was justified by the creation of value that could be attributed to the integration of landline with mobile. The merger increased Telecom’s debts and they now are over 41,000,000,000 Euro. But it allowed Telecom to access the cash flow generated by Tim. A year later Telecom Italia announces the release of Tim in the name of an imaginary readjustment. The directors that approved the merger, even the so-called independent ones are approving the operation.

This is an incomprehensible U turn from a strategic or industrial view point. Telecom Italia from the moment that it was handed over debt-laden to the so-called “captains courageous” in 1999, has known only, sell-offs, release of sections, and reduction of personnel. Today it risks imploding. Olimpia, that has the controlling package for Telecom, has the Telecom shares marked up with a value that is double that of the market. But there is complete indifference on the part of the controlling bodies. This is a value that is by now no longer recoverable, even according to the most benevolent analysts. The splitting off of Tim and the subsequent sale are an extreme attempt to reduce the heavy indebtedness of the group.

I maintain that the Government must intervene. In particular as regards the backbone, to safeguard national interests. Telecom is the umpteenth demonstration that the sale with debts of natural monopolies on the part of the State to private interests without a real financial capacity, does not produce positive results for the State nor for the citizens.

Posted by Antonio Di Pietro in Economy