Giant Telecom Company That Once Almost Bought Apple Is Teetering On the Brink of Failure

An anonymous reader quotes a report from Fortune: It's not a misprint. Telecom Italia SpA, Italy's beleaguered former telephone monopoly, once pitched a plan to buy Apple. About 25 years ago a group of executives from the carrier flew to California to meet Apple co-founder Steve Jobs, with an audacious plan to buy the tech company at a time it was struggling to make headway against rivals like International Business Machines Corp. Telecom Italia, on the other hand, was flying high, ranking as the world's sixth-largest telephone company by sales. Worth about $100 billion, it had minimal debt, held stakes in dozens of tech groups around the world and employed more that 120,000 people. Although Apple's rise back from the ashes is well documented, the fate of its would-be buyer is less well known outside Italy. Today, the carrier is burdened by more than 30 billion euros in gross debt, it controls just one company outside its domestic market -- Brazil's No. 3 phone operator -- and it employs only a third as many people as it did when its executives made their pitch to Jobs. Most tellingly, Telecom Italia now finds itself in the position of needing to sell off its landline network just to get its debt pile under control. The sale would be a transformational deal and, if successful, the first such divestiture for a European carrier. In a small twist of fate, the likely buyer is a US company, though it's not a tech giant like Apple but private equity powerhouse KKR & Co. With progress being made toward a disposal of the network, Telecom Italia's one truly valuable asset, now seems as good a time as any to ask, what happened to this once-promising company? [...] Regardless of the outcome of the network battle, the carrier won't look the same after the dust has settled. "Telecom Italia's future will now be mostly linked to its capacity of being more agile and luring new customers with more profitable services," said Laura Rovizzi, chief executive at Rome-based strategy and regulation consultant Open Gate Italia. And the carrier's service unit, basically all that would remain of Telecom Italia after a network selloff, would itself probably need to weigh a transformational deal with a tech company to guarantee its competitive footprint, she added. With so many uncertainties ahead, there's probably only one safe bet for Telecom Italia. The carrier won't be trying to buy Apple again.

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