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Telecom Italia has finally offloaded its international wholesale subsidiary Sparkle to Italy’s Ministry of Economy and Finance (MEF) in a €700m ($733m) deal with Retelit, a fibre optic operator controlled by Spanish Infrastructure fund Asterion.
Sparkle operates one of the world’s most extensive submarine cable networks, providing backbone connectivity across Europe, the Mediterranean, Africa, the Middle East, and the Americas.
Telecom Italia’s board unanimously approved the deal, which was first put forward as a non-binding offer in October 2024 but was rejected by the board. The sale is expected to be completed within the first quarter of 2026, subject to regulatory approvals.
Fixed network infrastructure losing the Sparkle
The disposal of its international infrastructure and services unit is the last step in the company’s strategy to divest its fixed network infrastructure.
In October 2023, the telecom operator divested its domestic fixed-line assets business “NetCo” to US investment firm, KKR, in a deal worth €18.8bn, which enabled the company to concentrate on the domestic market while focusing on emerging technologies, including 5G and digital solutions, while improving its financial position to reduce overall debt.
A strategic asset
The Italian government, led by Prime Minister, Giorgia Meloni, understands the importance of Sparkle and its role in transmitting sensitive data across the Mediterranean and to the Americas, and seeks to bring the network under Italian jurisdiction as part of the government’s plan to take control of more strategic assets.
Telecom Italia has established multiple domestic partnerships with domestic companies to help protect its subsea infrastructure.
In December 2024, the carrier formed a strategic partnership with Italian shipbuilding company Fincantieri, signing a Memorandum of Understanding (MoU) to develop technological solutions for the surveillance and protection of submarine telecommunications cables, and working with the Italian Navy since 2022 to protect its fibre optic network.
A growing trend for governments
In a growing trend, governments are understanding the importance of digital infrastructure and how it can impact on not only global communications, but also economic growth and national security.
This has led to governments becoming more involved, not only through regulation but also through other arrangements including financial investments, strategic partnerships and security and defence initiatives.
While the Sparkle deal isn’t the first acquisition by a government, in a similar move in June 2024, the French government acquired an 80% stake in ASN (Alcatel Submarine Networks) from Finnish telecoms giant Nokia.