Telecom Italia (TIM) is set for a €1 billion ($1.1bn) payout after it won its 15-year dispute with the Italian government over the liberalization of the telecoms sector.

A court in Rome ordered the government to pay the sum after TIM sought to recover the license fee it was required to pay to the state in 1998, the year after the telecoms sector was deregulated.

The Italian government said it would appeal to the Supreme Court against the ruling and wants the court decision to be suspended until the appeal is heard.

In a statement, TIM said that the amount due for the original license fee is €500 million ($543m), plus a revaluation accrued interest for a total of about €1 billion ($1.1bn).

According to TIM, the Court of Justice of the European Union has intervened in the case on several occasions.

"In particular, in 2020, the European judiciary ruled that the EU regulatory system did not permit a national regulation to extend for the year 1998 the obligation imposed on a telecommunications company, previously a concessionaire (such as TIM), to pay a license fee calculated on the basis of its revenues, but only permitted the demand for payment of the administrative costs connected with the issuance, management, control, and implementation of the general authorization and individual license system," said TIM.

Earlier this year, the Italian government approved Telecom Italia's planned sale of its fixed line network to KKR, worth €22 billion ($23.9bn).

The deal, which has been on the cards for some time, has been supported by Giorgia Meloni's Italian government since 2022, which plans to take a 20 percent stake.

TIM approved the deal without making it conditional on a vote by shareholders, with the board voting 11-3 in favor of the deal.

KKR valued the assets at €18.8bn ($20.5bn), but the overall value of the deal is as much as €22bn ($23.9bn) based on what can be earned if the grid is merged with that of small rival Open Fiber SpA.

Debt-ridden TIM expects the sale to reduce its debt by €14bn ($15.25bn).