EC could OK Italy mobile merger next week: report

The European Commission’s competition regulators could give the green light to CK Hutchison and VimpelCom’s plan to merge their mobile operations in Italy as soon as next week, according to Bloomberg.

 

Citing two unnamed sources, the news agency said EU competition commissioner Margrethe Vestager is likely to hold a press conference to announce the decision, which would be ahead of the provisional EC deadline of 8 September.

 

CK Hutchison and VimpelCom said in August last year that they planned to merge 3 Italia and Wind Italia, creating a new fixed-mobile giant in Italy that would be in a stronger position to compete with Telecom Italia and Vodafone Italia.

 

Approval of the €21.8 billion deal would not come as much of a surprise: Reuters reported in July that concessions put forward by CK Hutchison and VimpelCom to enable the creation of a new mobile network operator would be enough to persuade Vestager and her colleagues to allow the merger to go ahead.

 

Under an agreement with CK Hutchison and VimpelCom, liad is to launch a new fourth mobile operator in Italy through the acquisition of assets and spectrum from the merged entity.

 

However, there are questions over whether Iliad will be able to bring genuine competition to the market; the disruptive model it adopted in France is unlikely to fit the bill in Italy, and it would be a mobile-only player – initially, at least – in a market that is gradually moving towards quad-play and converged services.

 

The Iliad deal does indicate that CK Hutchison has learned something about how to appease the EC:  make sure that facilities-based competition remains in place.

 

The commission blocked Hutchison’s bid to acquire O2 in the UK in May on the grounds that reduced competition would lead to higher prices, despite major efforts by the telco to ink a series of capacity deals that would have made it easy for a handful of other players to offer mobile services.