The merger of two national telecom providers could be greenlit if competition is preserved, he says.

Italy wants a stronger national telecoms network, Vittorio Colao said on Saturday. The Innovation Minister added this could be achieved by merging Telecom Italia (TIM) and Open Fiber assets under the condition that competition in the sector is maintained, according to a report in Reuters.

“What we’re keen on is a national telecoms infrastructure ensuring great performance and quality”, Colao told reporters on the sidelines of the Ambrosetti business forum. “If this were to happen by combining parts of Telecom (Italia) with Open Fiber, that’s welcome as long as competition is preserved.”

A former head of Britain’s Vodafone, Colao said he was worried about the industry in Italy and Europe because return on investments and innovation capacity has dropped in the past few years. Italy’s broadband performance lags behind that of many of its fellow European Union (EU) countries.

Consolidation at the local level could be acceptable

Colao confirmed that Italy, together with Spain and France, has called for the European Commission to come up with legislation that ensures Big Tech firms partly finance telecom infrastructure in the bloc, as reported by Reuters last month. Consolidation at the local level in a fragmented market could be a way to shore up the sector, but this needs to happen while safeguarding competition, Colao said.

Italian state lender CDP, which controls Open Fiber, signed a preliminary accord with TIM in May aimed at creating a unified wholesale network operator under state control by merging TIM’s fixed network infrastructure with that of Open Fiber.

CDP is preparing to make a non-binding bid for Telecom Italia’s fixed grid this month as it presses ahead with plans to create a single national network champion, two people familiar with the matter said. CDP is expected to submit its preliminary offer for TIM’s network before a general election on September 25, the sources said, cautioning deliberations were still ongoing.