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Swisscom also in the running to acquire assets divested as a result of Hutchison/Vimpelcom merger.
France’s Iliad and Caribbean-focused Digicel have submitted preliminary bids to acquire assets that would enable them to launch mobile operations in Italy, it emerged this week.
In all, three operators have come forward to acquire spectrum and mobile towers that could be hived off by CK Hutchison and Vimpelcom as they seek the go-ahead from Brussels for their Italian mobile merger, Bloomberg reported on Tuesday, citing unnamed sources.
The third player involved is Swisscom, which already offers fixed broadband services in Italy via its Fastweb subsidiary.
U.K.-based Sky ultimately did not proceed with an offer for the assets, the sources said.
The bids were presented to European competition commissioner Margrethe Vestager, they added. The Commission will provide feedback on the bids to Hutchison and Vimpelcom in the coming days, although it will not select a bidder.
The European Commission is in the midst of an in-depth review of Hutchison and Vimpelcom’s €21.8 billion agreement – signed in August 2015 – to combine their Italian mobile businesses, 3 Italia and Wind respectively, into a 50:50 joint venture.
It is due to present its statement of objections to the deal soon, which is likely to include competition concerns. According to the Commission’s Website, Hutchison and Vimpelcom submitted commitments in the merger case on Monday, but it did not provide any further details.
Should the merger go ahead the companies would divest spectrum and around 5,000 telecoms towers, sufficient to enable the winning bidder to establish a new Italian mobile operator. Given that the Commission seems set on ensuring that mobile markets have at least four facilities-based players, the creation of a new operator could go a long way towards satisfying any competition concerns.
CK Hutchison fell foul of that apparent requirement last month when, despite its best efforts to mitigate the threat to competition, its plan to acquire O2 in the U.K. and merge it with its own 3UK outfit was quashed by Vestager.
"The takeover would have removed an important competitor, leaving only two mobile network operators, Vodafone and BT’s EE, to challenge the merged entity," the Commission said. "The significantly reduced competition in the market would likely have resulted in higher prices for mobile services in the U.K. and less choice for consumers than without the deal."
The situation in Italy is similar. The merger of Wind and 3 Italia would bring together the country’s third and fourth largest players, creating a new mobile market leader ahead of incumbent TIM and current number two, Vodafone.
Hence it seems that the creation of a new operator – be it through the transformation of Fastweb into a converged operator, or the arrival of a new pure-play mobile disruptor – could well be the only way the Hutchison/Vimpelcom deal will find favour with the European Commission.
