The Italian government is keen on bringing Telecom Italia's (TIM) submarine cable unit Sparkle under state control.
This move could potentially pave the way for the Italian government to work towards a new strategy for the debt-stricken telco, which has been subject to much interest in recent months.
Reuters cited four sources as familiar with the matter, as the Italian government kicked off talks with Vivendi and state lender Cassa Depositi e Prestiti (CDP), who are two of TIM's biggest investors, to identify "the best market-friendly options" for the company by the end of this year.
It's reported that Sparkle could be worth an estimated €1 billion ($1bn). The government is keen to take the unit into state ownership due to the sensitivity of the data it carries, according to one source.
Sparkle operates fiber cables that stretch over 500,000km, spanning Europe, the Mediterranean, and the Americas. The company also operates four data centers in Greece – three in Athens and one in Chania – as well as facilities in Sicily and Turkey.
Talks of spinning off Sparkle suggest a change in direction from the Italian government which has been pondering what to do with TIM in recent months.
There's been strong intent from the Italian government to take TIM under state control, with Meloni's Brothers of Italy party outlining this intention before their election victory.
Earlier this week US investment firm KKR was said to be considering a bid for TIM's network but wants the Italian government to be a partner in any potential deal.
However, cash-strapped TIM has struggled to find a resolution to its woes with the company looking likely at one point to merge with state-backed rival OpenFiber to create a champion broadband player. That was at least the goal of the Italian state lender Cassa Depositi e Prestiti (CDP).
A planned bid by CDP was put on hold late last month, as the CDP was set to submit a non-binding offer for TIM's grid. CDP owns a 10 percent share in TIM and controls OpenFiber, and was said to be mulling over a potential bid of between €15 billion ($15bn) to €18 billion ($18bn).