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The valuation is critical to the group’s strategic aim to restructure its operations.

Telecom Italia (TIM) is looking to obtain a valuation of at least €25 billion for its grid under a plan to separate fixed-line assets from its services arm, according to a report in Reuters.

In May, sources told Reuters that TIM considered settling for a valuation of €20 billion in a potential network deal. The new price tag is closer to the €31 billion figure sought by TIM’s top shareholder Vivendi.

Sell first, then collaborate

The former phone monopoly could sell its domestic fixed access network and its submarine cable unit Sparkle as part of a government-sponsored project to create a unified broadband company with state-backed rival Open Fiber.

Valuation is a key issue in ongoing talks with state lender CDP to combine TIM’s network with Open Fiber, which is majority-owned by CDP. CDP is also the second-largest investor in TIM. TIM’s board will meet on Wednesday to discuss a business plan centred on splitting its fixed network assets from its service businesses.