Iliad is considering buying Telecom Italia’s domestic consumer services operations to strengthen its business in Italy, Reuters news report said.
Iliad is weighing the investment as TIM works on a turnaround plan centered around a split of the debt-laden TIM’s wholesale fixed network from its services business.
Iliad targets in particular the domestic consumer service unit TIM would create as part of its reorganization process.
The proposed business unit would include TIM’s fixed and mobile consumer businesses, which last year accounted for 73 percent of its 9.9 billion euro ($11 billion) domestic service revenue. It would include spectrum for running the mobile network business.
French billionaire Xavier Niel-promoted Iliad launched mobile services in Italy in 2018, intensifying price competition in Italy.
Iliad has shifted its focus to TIM after a failed approach for Vodafone’s Italian operations in February.
At the time Iliad teamed with Apax Partners to submit an 11.25 billion euro non-binding bid which the British operator rejected.
Apax, which is looking at a potential investment in TIM’s services business, is not working with Iliad at present.
“With the odds of a KKR bid virtually at zero, the breakup scenario seems to involve more and more options given the string of potential interested parties for certain portions of TIM’s business,” broker Banca Akros said in a note.
Akros said TIM’s consumer services business could be worth around 4 billion euros.