TIM lifted by expectations of single Italian broadband network

MILAN (Reuters) – Telecom Italia (TIM) shares rose by 3.4% on Wednesday as investors anticipated an acceleration of talks with Open Fiber to create a single ultra-fast broadband network in Italy.

TIM on Tuesday postponed to the end of August a decision over the sale of a minority stake in its so-called secondary landline, after Rome requested it negotiates a wider deal to merge its network assets with those of Open Fiber.

A Milan-based trader said TIM’s decision to extend the deadline showed a commitment to reaching a deal with Open Fiber.

“We have never been so close to reaching a deal on the single-network,” Mediobanca Securities analysts wrote.

Despite months of talks with Open Fiber, a joint venture owned by state utility Enel and state lender Cassa Depositi e Prestiti (CDP), issues regarding governance and regulation have so far stood in the way of a potential deal.

CDP also owns also a 10% stake in TIM, whose shares were up 3.4% at 0837 GMT, outperforming Milan’s blue-chip index <.FTMIB>. TIM shares have lost nearly 31% this year.

UBS analysts, however, cautioned against excessive optimism.

“We note the end of August might prove a very tight deadline to reach a deal considering its complexity and the multiple parties involved”, UBS wrote in a note to clients.

(Reporting by Elvira Pollina and Giancarlo Navach; Editing by Alexander Smith)