TIM SA in talks to buy back majority stake in Brazilian fibre unit, sources say

By Elvira Pollina

MILAN, Feb 2 (Reuters) – Brazilian telecoms operator TIM SA is in talks to buy back a 51% stake in a fibre-network business it previously controlled under a deal that could be worth around $170 million, two people with knowledge of the matter said.

TIM SA, which is majority owned by Telecom Italia, sold the stake in I-Systems, which was then called FiberCo, to independent communications infrastructure company IHS Towers in 2021.

Global telecom carriers have over the past decade been selling off towers and fibre networks to raise funds and share the heavy investments required to expand communications infrastructure.

However, IHS Towers, like rival neutral fibre operators in Brazil, has struggled to reach the customer scale needed to support a standalone model for I-Systems.

The stake in the unit, which would give TIM Brasil full operational control of the business, could be valued at around 900 million reais ($171.05 million), said the two people, who declined to be named because the talks are not public.

TIM COULD APPROVE DEAL AS EARLY AS FEBRUARY 10

Telecom Italia last month mandated TIM SA, in which it owns a 67% stake, to move ahead with the negotiations and named Rothschild as an adviser on the deal, the sources said.

TIM SA could approve a potential transaction as early as February 10, when its board meets over full-year results, the people said. But they cautioned that negotiations may take longer.

Spokespeople for TIM SA, Telecom Italia and Rothschild declined to comment. IHS Towers was not immediately available to comment.

A purchase of IHS Towers’ stake in I-Systems would mirror a move by TIM SA’s rival Vivo, which last year regained full ownership of FiBrasil, the fibre joint venture it launched in 2020.

I‑Systems operates in 41 Brazilian cities with a network covering an area including 9.3 million homes, according to its website.

Under the current joint-venture structure, I-Systems builds new fibre infrastructure for TIM and handles its operation and maintenance, while TIM serves as anchor tenant under a long-term master services agreement.

($1 = 5.2617 reais)

(Reporting by Elvira Pollina; Editing by Joe Bavier)