Swisscom subsidiary Fastweb sells stake in fiber-optic network company

The Swisscom subsidiary Fastweb is selling its stake in the Italian fiber optic network company Fibercop to the US investment company KKR. Fastweb is receiving a sale price of EUR 438.7 million for its 4.5% stake in Fibercop.

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Fastweb is thus exiting the joint venture, which was founded in 2021 by Telecom Italia (TIM), KKR and Fastweb to expand the fiber optic infrastructure in Italy, as Swisscom announced in a communiqué on Wednesday. The transaction has no influence on the contract with Fibercop for the shared use of the fiber optic network by Fastweb - in technical jargon a "wholesale contract". The transaction is expected to be completed in the third quarter of 2024 if the takeover of the fixed network company Netco by KKR goes ahead.

No impact on annual targets

The sale resulted in a profit of 189 million euros from the difference between the sale price and the book value, as a spokesperson told the news agency AWP when asked. However, this profit is recognized directly in equity and has no impact on the Group's net profit.

According to the information provided, this is due to a corresponding accounting standard (IFRS). The transaction therefore has no impact on the financial outlook for the 2024 financial year, the spokesperson added.

No surprise

The sale comes as no surprise: last week, the EU approved the takeover of Netco by KKR without any conditions. Netco comprises the fixed network division of Telecom Italia and Fibercop. The deal would not significantly reduce competition in the broadband network market in Italy, wrote the EU Commission. The sale will enable Telecom Italia to reduce its mountain of debt.

For its part, Fastweb emphasized that it would continue to invest in the expansion of its own fibre-optic network. In addition, the company continues to offer its competitors shared use contracts for the fiber optic network.

Swisscom wants to expand strongly in Italy. At the end of February, the largest Swiss telecommunications group announced the purchase of Vodafone Italia for a total of 8 billion euros, and the purchase agreement was signed in mid-March. Vodafone Italia will be merged with Fastweb. This will give the broadband company Fastweb its own mobile network and turn it into a full-service provider. (SDA/swi)

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