Industry Implications Of Retelit's Sparkle Purchase For $700 Million
Retelit is a competitive Italian carrier with a pan-European network. Retelit together with the Italian Ministry of Economy and Finance have purchased Sparkle with a 30/70 ownership split. Why the current Italian government keeps insisting on public ownership of telecommunications infrastructure is beyond me. There are no real benefits. Italian government interference in important sectors like banking and now telecom have brought only problems, no solutions. Government ownership often leads to management sacrificing long term financial health to goals such as preserving head count. This purchase together with the recent EXA acquisition of Aquacomm for only $45 million despite a couple hundred million dollars in network investments raises alarm bells about the financial health of the subsea cable industry. Sparkle generated a billion Euros in fiscal 2023 or 1.14 billion dollars at the current exchange rate. Yet it was purchased for far less than current revenues, a sig...