The Italian government announced it will merge Telecom Italia into Stet to form a single company called Telecom Italia, which will continue to control the country’s cellular operator Telecom Italia Mobile.
The government currently owns more than half of Stet, a telecommunications holding company, which in turn is a majority owner in telecommunications services operator Telecom Italia.
TIM now operates an analog and a Global System for Mobile communications network. Its competitor is the privately owned company Omnitel Pronto Italia, a GSM operator.
The move, according to Italian sources, is seen as a step toward privatization of Italy’s telecommunications market. The European Commission has proclaimed 1998 as the deadline for all member countries to have liberalized their markets.
The government hopes the merger will build up Telecom Italia’s equity before it sells off the company.
However, legislation needed for the sale is blocked by parliament, reported Reuters.
The news agency said the sale regularly has been delayed in the past and infighting continues to postpone any action.
In related news, Italian Post and Telecommunications Minister Antonio Maccanico stated Jan. 23 he would ask Stet to pay $75 million to the state as compensation for the $450 million license Omnitel was required to pay rather than abide by a previous agreement made between the government, Omnitel and TIM.
“This surprised and outraged all” including the EC, said Omnitel spokesman Patrick Trancu.
The following day, Maccanico stated he would honor the previous agreement, which called for Omnitel to be allowed to connect to state-controlled telephone lines at a reduced rate, said Trancu.
The government plans to issue a tender for a third mobile phone operator in March.
