Big funds gear up to invest in Italy's broadband champion - sources


By Stephen Jewkes, Elvira Pollina and Pamela Barbaglia

MILAN/LONDON, Oct 24 (Reuters) - Some of the world's biggest infrastructure funds including Australia's Macquarie and Singapore's GIC are considering first steps that could lead to them taking part in Italy's plans to create a national fast broadband champion, sources said.

Italy is trying to engineer a merger of former phone monopoly Telecom Italia TLIT.MI with its smaller rival Open Fiber to create a single ultrafast broadband operator and avoid duplicating investments worth billions of euros.

Last month, Telecom Italia (TIM) actively canvassed funds potentially interested in network investments and presented a list to the two shareholders of Open Fiber, state lender CDP and utility Enel ENEI.MI.

More than a dozen infrastructure and sovereign wealth investors, which also include Ardian and Brookfield, have signed or are considering signing non-disclosure agreements (NDA) to prepare bids for a stake in full-fiber carrier Open Fiber, the sources said.

Separating fixed-line networks from service businesses is seen as one of the few ways that legacy telecoms providers can create new value for shareholders. The steady returns are attractive for long-term investors.

"Some of the funds have started to sign the NDAs and return them to TIM," one of the sources said.

TIM, CDP and Enel declined to comment. Representatives at Macquarie, Ardian and Brookfield declined to comment while GIC was not immediately available for comment.

(Editing by Jane Merriman)

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