Italy has shaken up its telecommunications operations in a big way, with the Italian parliament formally approving a plan first proposed over two years ago – which will do away with one of its telecommunications carriers, and see control put into the hands of the state-held Istituto per la Ricostruzione Industriale, the IRI. The move will help untangle the most complicated telecommunications regime in Europe. According to Reuter, the company for the chop is Azienda di Stato per i Servizi Telefonici – ASST, widely considered an anachronism because of the international-domestic split between its services and the overlap with the other Italian carriers. Currently, ASST provides inter-city phone links and international lines to some European and Mediterranean countries. It will continue to function for one year under the auspices of the IRI (though it is not clear in precisely what form), but then its assets will be split between two other state-owned carriers, domestic phone operator SIP SpA and international carrier Italcable SpA. Both SIP and Italcable are controlled by state telecommunications holding STET SpA, while ASST is currently controlled by the Post Office Ministry. SIP is expected to do best from the deal if, as expected, it inherits ASST’s domestic business; it has been estimated that it could eventually see a 10% increase in its revenues. Italy’s fourth state telecommunications operator, STET Down-linking Facilities, is unaffected by the reform. Although the moves are being seen as an important step in rationalising Italy’s telecommunications industry, analysts are predicting that it will be some time before the benefits are felt by the remaining carriers. That has not stopped SIP shares from rising, however – fuelled in part by speculation that the plan would be adopted, they have risen from the equivalent of $0.84 last August to peaks of $1.27 earlier this month. Speaking to Reuters’ Yann Tessier, Enrico Ponzone, Italian economist with Kleinwort Benson, feels this to be premature, and says that the market is getting enthusiastic about something that will take place in one year at the earliest. Indeed, there are still many questions left to be answered which could affect SIP’s future revenues, most notably the fate of ASST’s 18,000-strong workforce. They are currently guaranteed work for life as Ministry employees, but the move to IRI would see them lose that privilege – so ASST could find itself footing a hefty bill in compensation. Similarly, SIP is likely to want to cut staff, which may result in large redundancy pay-outs when it takes charge.
