The Italian government will not stand in the way of the planned merger between Wind and 3 Italia.
The cabinet agreed to a proposal by the Ministry of Economic Development not to exercise its right of veto in the case, the government announced on Tuesday.
However, the state has asked the companies to provide certain information regarding the impact of their tie-up. Amongst other things, the firms must confirm that they do not have plans that would compromise national security or the continuity of services, such as moving management functions overseas, for example.
Vimpelcom’s Wind and CK Hutchison-owned 3 Italia signed a €21.8 billion merger agreement in August.
The pair intend to create a 50:50 joint venture to create a stronger competitor in the Italian mobile market. Together the pair have around 31 million mobile customers which could put them ahead of market leader TIM, with 30.1 million as of the end of June.
The firms are much smaller than Telecom Italia on the fixed-line side though, which could be an area of focus for the new entity on completion of the merger, given the growing trend towards bundled and converged service offerings.
In the meantime though, the operators need to secure regulatory approvals for the deal.
The Italian government may have given the go-ahead, but the companies still need to win over European competition commissioner Margrethe Vestager, who recently succeeded in preventing a mobile merger in Denmark on the grounds that the market needs four mobile network operators to remain competitive.
The situation in Italy is more akin to the the U.K. than it is Denmark though.
The Wind/3 Italia tie-up will leave three players of roughly equal size; the market’s third operator, Vodafone, had 24.9 million customers at mid-year.
And Canning Fok, co-CEO of CK Hutchison is confident of seeing through both his Italy and U.K. deals – the company is in the process of buying O2 UK from Telefonica – to completion.
He told the FT recently that, when it comes to the regulatory situatio n, he is confident of coming up with a solution "in which everyone is comfortable."
