US private equity firm KKR first made a non-binding bid to take control of Italian operator TIM last year, offering €10.8 billion. 
At the time, TIM was in something of a vulnerable position, with then-CEO Luigi Gubitosi coming under fire from shareholders for failing to provide the financial uplift that had been promised. The bid from KKR hasted Gubitosi’s departure, with TIM Brasil’s CEO, Pietro Labriola, taking over as Group CEO at the start of 2022…

US private equity firm KKR first made a non-binding bid to take control of Italian operator TIM last year, offering €10.8 billion. 

At the time, TIM was in something of a vulnerable position, with then-CEO Luigi Gubitosi coming under fire from shareholders for failing to provide the financial uplift that had been promised. The bid from KKR hasted Gubitosi’s departure, with TIM Brasil’s CEO, Pietro Labriola, taking over as Group CEO at the start of 2022. 

Labriola brought with him a plan to restructure the business, including separating its wholesale network and service arms into separate units. This radical change aimed at harnessing what TIM has described as the business’s ‘untapped value’, opening the door for fresh investment from external players. 

Furthermore, the split would free the company’s infrastructure unit for a potential merger with rival Open Fiber, creating a single national fibre network across Italy that had long been sought by elements of the Italian government. 

Throughout this process, which has now lasted over fourth months, KKR has been left waiting for a formal answer to its takeover proposition. 

Formal discussions between TIM and KKR finally began late last month, with KKR reiterating its interest in submitting a takeover bid. However, the company said that it was unable to confirm its non-binding offer without conducting due diligence of TIM’s finances, noting that the global economic environment had changed dramatically since their bid was first submitted.  

Now, TIM has declined to give KKR the information it requested, saying that « it would not be appropriate at this time to grant KKR access to due diligence ».

The operator said that it would reconsider this decision if KKR were to submit a formal offer. 

« Should KKR submit a deliverable, complete and attractive offer … TIM Board of Directors would be open to reconsidering its decision in the interest of all shareholders, » said the company.

With the two companies seemingly reaching an impasse, it seems likely that this signals the end of KKR’s formal takeover ambitions. 

However, there could yet be other avenues through which KKR can capitalise on TIM’s restructure. The US firm already owns a 38% of TIM’s ‘last-mile’ network, Fibercop, and additional investment in TIM’s infrastructure unit could see them play a key role in the proposed merger with Open Fiber 

« KKR ultimately confirmed its interest in exploring any other transactions in the interest of the company, its shareholders and Italy, » said a statement from TIM.

Meanwhile, in related news, TIM has already been approached by UK-based private equity fund CVC, looking to purchase a 49% stake in TIM’s separated service business. 

According to analysts, TIM’s enterprise business could be worth around €10.5 billion. 

Other private equity funds, including Apax Partners and Apollo Global Management, are also reportedly interested in bidding for TIM’s service unit.

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According to reports, Sky and Vodafone are among a number of suitors having approached UK broadband ISP TalkTalk regarding a potential acquisition. 
The reports note that TalkTalk have appointed investment bank Lazard to review their options…

According to reports, Sky and Vodafone are among a number of suitors having approached UK broadband ISP TalkTalk regarding a potential acquisition. 

The reports note that TalkTalk have appointed investment bank Lazard to review their options.

TalkTalk was taken private in a £1.1 billion purchase by Toscafund back in 2020, valuing the business at around £2 billion. Since then, despite difficult years during the pandemic, the company has seemingly grown in value, with TalkTalk founder and chairman Charles Dunstone reportedly suggesting that the business is now worth “at least” £3 billion.

In 2021, TalkTalk reported having around 4 million broadband subscribers.  

Vodafone has long been interested in purchasing TalkTalk, with discussions having taken place numerous times over the past couple of years but always fizzling out for unknown reasons. Vodafone itself has just under a million broadband subscribers, so the addition of TalkTalk’s subscriber baser would see their position in the fixed market hugely enhanced.

Sky, meanwhile, already has roughly 6.7 million broadband customers, but this does not mean their acquisition of TalkTalk would be any less ground-breaking. The move would immediately make them the UK’s largest broadband provider, exceeding current market leader BT’s tally of roughly 9.2 million subscribers as of January 2022.

TalkTalk has yet to receive a formal offer from either company.

How would the acquisition of TalkTalk reshare the UK’s connectivity landscape? Find out from the experts at this year’s live Connected Britain conference

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Spectrum Coordination Act set to smooth collaboration between FCC and NTIA

Earlier this week, the US government voted to approve the Spectrum Coordination Act, a bill obligating the FCC and NTIA to update their Memorandum of Understanding (MoU) over spectrum coordination for the first time since 2003. 
It would seem, however, that this bill is something of a formality, with formal work to increase collaboration between the two governing bodies already underway. 
The FCC and NTIA held their first meeting last week as part of a joint Spectrum Coordination Initiative they launched they back in February…

Earlier this week, the US government voted to approve the Spectrum Coordination Act, a bill obligating the FCC and NTIA to update their Memorandum of Understanding (MoU) over spectrum coordination for the first time since 2003. 

It would seem, however, that this bill is something of a formality, with formal work to increase collaboration between the two governing bodies already underway. 

The FCC and NTIA held their first meeting last week as part of a joint Spectrum Coordination Initiative they launched they back in February, aiming to smooth collaboration between the two organisations over national spectrum policy. Following the meeting, the pair announced the creation of a new joint task force, set to focus on ironing out the details of a new MoU.

“Congress has been clear about NTIA’s statutory role as manager of the Federal government’s use of spectrum and the FCC as the independent agency responsible for non-federal spectrum policy. Our agencies have a long history of working together to ensure that spectrum policy decisions foster economic growth, ensure our national and homeland security, maintain U.S. global leadership, and advance other vital U.S. needs. That will only continue and grow as we build this new agreement,” said a joint statement from FCC chairwoman Jessica Rosenworcel and Assistant Secretary of Commerce Alan Davidson. 

As part of the update to the companies’ MoU, the organisations pledged to improve communication, coordination, and joint research, as well as holding regular formal meetings about joint spectrum planning.

The at times dysfunctional relationship between these two organisations has been recognised for some time.

The NTIA is the manager of the government’s spectrum usage, while the FCC oversees non-federal usage, meaning there is plenty of opportunity for miscommunication and controversy. In recent years, disputes between the organisations have focussed largely on the FCC’s opening up of certain spectrum bands already in use by services like weather and global positioning systems (GPS) to telecoms operators, thereby potentially threatening interference for these existing services.

However, perhaps the largest and most public clash took place around the start of this year, when the FCC found itself embroiled in a clash between mobile operators and the Federal Aviation Administration (FAA) over the deployment of 5G. 

The FCC had auctioned 5G C-band spectrum in February last year, raising over $80 billion in a highly competitive auction process. Verizon and AT&T quickly rushed to deploy the new spectrum, planning to activate it at the start of this year. However, the FAA raised high-profile objections to the launch of these services, arguing that they would interfere with crucial flight instrumentation.

The FCC disagreed, saying that their research showed that the C-band spectrum would not cause disruption to aviation operations; this spectrum band had already been deployed in numerous markets around the world with no recorded disturbance to the aviation industry. Nonetheless, the operators granted delays to their launch of new services using this spectrum and airlines ultimately became 5G buffer zones to minimise perceived disruption.

As this saga showed, a lack of coordination between the FCC, the NTIA, and other government organisations over spectrum policy can cause significant and costly setbacks for telecoms operators and other services that rely on this crucial connectivity. Better collaboration between the organisations offers some very tangible benefits, especially as additional spectrum bands continue to be released to telecoms operators.

The FCC is currently planning another 5G auction, this time offering spectrum in the 2.5GHz band, which will take place later this summer. 
 

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Also in the news: 
Crafting the perfect digital foundation: DE-CIX and the importance of regional expansion
TIM starts formal talks with CDP for building Italian single network
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Telenet has announced that it has selected to deploy Netcracker Technology’s Online Charging System (OCS) as part of its ongoing digital transformation programme. Netcracker’s Digital BSS solution, of which OCS is a part, will offer Telenet converged single…

Telenet has announced that it has selected to deploy Netcracker Technology’s Online Charging System (OCS) as part of its ongoing digital transformation programme. Netcracker’s Digital BSS solution, of which OCS is a part, will offer Telenet converged single-stack support for both fixed and wireless services.

By integrating multiple IT stacks and upgrading to OCS, the Belgian operator will be able to improve its time to market, offer an omnichannel experience for its customers and reduce overall costs.

Micha Berger, CTO at Telenet commented: “Integrating our customers onto a single BSS platform is a big challenge, but with Netcracker as our strategic partner, we’ve been able to manage all the steps very well and realize business benefits, including lower costs. Netcracker’s converged BSS stack, including OCS, has given us the flexibility and capabilities to support our customers with an optimized digital experience.”

Ari Banerjee, Vice President of Strategy added: “This is the most recent phase in a long-term, trusted partnership with Telenet, which has undergone numerous mergers and acquisitions and other business changes that have presented challenges and complexities with their IT systems. Our work with Telenet keeps the focus on how to quickly realize business benefits, such as lower total cost of ownership and a simplified deployment, while continuing to provide a stellar customer experience and the flexibility and agility to adapt to future requirements.”
 

 Want to keep up to date with the latest developments in the world of telecoms? Subscriber to receive Total Telecom’s daily newsletter here

Also in the news: 
Crafting the perfect digital foundation: DE-CIX and the importance of regional expansion
TIM starts formal talks with CDP for building Italian single network
Connecting Germany: Building the fibre that underpins 5G