AT&T has announced that it is in negotiation to acquire a one third stake in Olimpia S.p.A., the company that holds a controlling 18 percent stake in the Italian current operator, which generated $41.8 billion in revenues in 2006. Along with AT&T, America Movil is also in talks to buy an equivalent stake, which equates to an indirect 6 percent holding in Telecom Italia. AT&T, which owns an 8 percent stake in the Mexican cellular operator, is of the view that it will only acquire stake in Olimpia if America Movil does, too.
Strategically acquiring stakes of Telecom Italia would place AT&T in an advantageous position in terms of global business. Speaking over the acquisition AT&T has said, ‘Italy is an important market for us, but this isn’t about taking control of Telecom Italia, it’s about working more closely with them. We would look to develop services with Telecom Italia, which has assets in a number of markets that we view as important, such as France, Germany, the Netherlands, and Brazil.’
The company further stated that AT&T already has a network presence in Italy, with a number of IP network nodes in major cities, but securing a stake in Olimpia would take AT&T’s involvement in Italy to a different level.
As a matter of fact, AT&T wants to strengthen its presence in Europe following a decline in fixed-line services in the US. On the other hand, America Movil, owned by billionaire Carlos Slim, is looking to increase its supremacy in Latin America by taking over Telecom Italia’s Brazilian operations.
AT&T is planning plans to spend more than $750 million in 2007 to increase its global communications network for corporate customers; the figure marks an 89 percent improvement over last year. However, the acquisition of Olimpia will be funded separately.
