Telecom Italia made further progress towards creating a single fibre network company in the nation by signing a preliminary deal with state lender CDP to combine its fixed assets with those of Open Fiber.

The Italian operator stated the agreement was also backed by US investor KKR and Australia-headquartered Macquarie Asset Management, which hold stakes in Telecom Italia’s FiberCop fixed-line business and Open Fiber, respectively.

Telecom Italia explained the next step will be to start the process aimed at creating a single network provider, which would be controlled by CDP Equity with participation by Macquarie Asset Management and KKR. The intention is to sign any binding agreements by 31 October.

The operator started the merger talks with CDP in April as it pursued an alternative path to a takeover by KKR.

Earlier this year, Telecom Italia CEO Pietro Labriola outlined a plan to separate the Italian operator into two units by splitting infrastructure assets from services operations. It intends to reveal more details on the plan at its capital market day on 7 July.

Telecom Italia recently signed a commercial agreement to share its network infrastructure with Open Fiber to accelerate rollout of fibre into remote areas.