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French telco takes ‘unique opportunity’ to enter Italy as Hutchison, VimpelCom seek to win over European regulators for mobile merger.
Iliad will acquire a portfolio of assets divested as a result of the planned 3 Italia/Wind merger in Italy, presuming the deal gets the go-ahead from the European Commission, it announced late on Tuesday.
The French operator said it has brokered a deal with CK Hutchison and VimpelCom, parent companies of 3 Italia and Wind respectively, to acquire the spectrum and base station sites they have offered to sell as part of a remedy package presented to Brussels.
The deal is a "unique opportunity" for Iliad to enter the Italian market, the telco said, in a statement.
"The remedy package would enable the Iliad group to offer competitive mobile services and to become a fourth mobile network operator with nationwide coverage," it said.
Iliad has agreed to pay €450 million between 2017 and 2019 for 35 MHz of paired spectrum suitable for 3G and 4G services. The spectrum comprises 5 MHz of 900-MHz airwaves, and 10 MHz each of 1800-MHz, 2.1-GHz and 2.6-GHz frequencies.
It has also undertaken to purchase "several thousands of macro sites" in densely populated areas, as well as several thousand more in rural areas, although it could replace the latter with a RAN-sharing agreement with the merged entity.
In addition, Iliad has brokered a deal to roam on the merged entity’s 2G, 3G and 4G infrastructure for a five-year period, renewable for a further five years.
Hutchison and VimpelCom agreed to merge their Italian operations into a 50:50 joint venture in August last year via a €21.8 billion deal, which is currently being examined by the European Commission’s competition authorities.
The telcos doubtless hope that having a disruptive force lined up to enter Italy as a fourth mobile network operator will smooth the way in Brussels.
In May European competition commissioner Margrethe Vestager blocked Hutchison’s plans to acquire O2 in the U.K. and merge it with 3UK on the grounds that such a move would be harmful to competition. Having just three network operators in the market could lead to less choice for consumers and higher prices, Vestager warned at the time.
The Commission has until 8 September to make a decision on the Italy case.
