KKR Knows a Good Monopoly Play When It Sees One
The buyout firm is betting Italy's broadband network plan will pay off. It could be proven wrong by heavy investment needs and a failure to unite rival fiber providers.
Building the network of the future.
Photographer: Alessia Pierdomenico/BloombergOne easy way to lose money in European telecoms has been to invest in Telecom Italia SpA. That’s an inauspicious backdrop to the deal between U.S. buyout firm KKR & Co. and the owner of Italy’s fixed-line phone network. This time the range of outcomes is wide open.
Italian broadband infrastructure badly lags the rest of Europe. Overstretched legacy monopoly Telecom Italia has struggled to afford the needed investment. It also faces competition from Open Fiber SpA, a broadband partnership between utility Enel SpA and state-backed bank Cassa Depositi e Prestiti SpA.