BlackRock, the world’s largest asset manager, has raised its stake in Telecom Italia to 5.1%, according to a regulatory filing dated August 26 and cited by Reuters. The filing showed that BlackRock previously held a 4.977% aggregate interest in the Italian telecommunications operator. The new position includes 3.585% of voting shares, 1.1% in potential holdings, and 0.414% in other long positions settled in cash.
The increase, while modest in size, is being seen by market participants as an important signal of confidence in Telecom Italia, which has faced years of financial uncertainty, political involvement, and stalled attempts at consolidation in the Italian telecoms market. Shares in the group were flat on Friday after plunging as much as 8% earlier in the session when French rival Iliad ruled out reviving merger talks, but by midday had recovered 2.5% to €0.42. Despite recent volatility, Telecom Italia stock has climbed 75% over the past year, supported by strategic investors such as Poste Italiane, which holds 24.8%, and expectations of industrial restructuring.
Italy’s telecoms sector remains one of the most competitive in Europe, with four operators competing in a market where margins are slimmer than abroad. Barclays analysts recently noted that no operator in Italy is currently earning its cost of capital, with average returns at only 1.2%, and argued that consolidation remains “much needed” even if near-term prospects are limited. The European Commission has previously indicated that a reduction in the number of Italian operators from four to three would not be considered a threat to competition or consumers, in line with its stance in other European markets.
Iliad Chief Executive Thomas Reynaud said last week there had been no discussions with Telecom Italia since April and that none were planned, effectively ruling out near-term prospects for consolidation in Italy. The French company is instead focusing on its domestic market, confirming preliminary talks with competitors regarding SFR, the debt-laden operator owned by Altice. Industry observers note that a potential deal involving SFR could reduce the number of mobile operators in France from four to three, following earlier comments from Orange in June that the French market would benefit from consolidation.
Despite setbacks in Italy, Iliad continues to expand its subscriber base across Europe. In the first half of 2025, group revenues rose 3.8% year on year to €5.09 billion. Its Free brand in France held steady at 23.1 million subscribers, Poland added 100,000 to reach 15.5 million, and Italy gained 505,000 to reach 12.5 million.
While Iliad’s stance dampens immediate prospects for merger activity in Italy, many observers believe talks with Telecom Italia could resume in the future. For now, BlackRock’s move to increase its holding beyond the 5% threshold is viewed as a stabilizing factor for the company, underlining long-term investor support at a time when the Italian telecom sector continues to face structural challenges.
