Italy's Treasury, in collaboration with the Spanish infrastructure fund Asterion, has submitted a non-binding bid of €700 million (approximately $774 million) for Telecom Italia's submarine cable unit, Sparkle.

Sparkle is a strategically important asset, boasting an extensive fiber network of over 600,000 kilometers that connects Europe, the Mediterranean, and the Americas.

As one of the few major players in the European submarine cable market, Sparkle competes with companies like Orange, Vodafone, and Telxius.

The joint offer, which includes Retelit, an Italian fiber network operator owned by Asterion, was confirmed by Italy's finance ministry.

This proposal values Sparkle at €700 million and is valid until October 15, pending approval from Telecom Italia's Board of Directors.

This marks the second offer for Sparkle, following Telecom Italia's rejection of a lower bid of €625 million earlier this year.

In February, Telecom Italia deemed the previous offer insufficient, which included an additional €125 million based on an earnout mechanism.

Telecom Italia is under pressure to reduce its significant debt, which rose to €21 billion as of June 2023, while also aiming to improve its financial position.

Despite these challenges, TIM forecasts an 8-9% increase in adjusted EBITDA for the full year after a 13% rise to €1.8 billion in the first half of 2024.

In addition to the Sparkle bid, TIM has initiated a process to sell its fixed network to American investment firm KKR, potentially raising up to €22 billion.

Earlier in 2023, TIM generated cash by selling its remaining stake in a holding company for €250 million.

Submarine cables are crucial for intercontinental communications, with approximately 99% relying on them, making them susceptible to espionage and sabotage.