A mobile merger could be in the offing in Italy, with discussions between two major players reportedly ramping up.
Hutchison Whampoa, owner of 3 Italia, has been holding talks with Wind parent Vimpelcom regarding a possible combination of their mobile assets for some time and the pair have now stepped up negotiations, Bloomberg reported on Tuesday, citing people familiar with the situation.
One of the newswire’s sources added that the telcos have made progress in resolving a number of disputes, including disagreements over the ownership structure of the merged entity. Talks are now focusing on a deal that would see 3 Italia, the smaller of the two, acquiring Wind.
Previous talks between Hutch and Vimpelcom fell apart last year because the former wanted to control the merged company, while Vimpelcom was seeking a 50:50 joint venture, Bloomberg noted.
However, despite the progress the operators have made since then, there is still no guarantee that the negotiations will result in a deal, it said.
A tie-up between Wind and 3 would reduce the number of mobile network operators in Italy to three from four and therefore would attract the scrutiny of national regulators and the European Union.
However, Wind and 3 are the third and fourth largest mobile operators in Italy by subscribers, together controlling a third of the market. Therefore, their merger would leave three strong network operators, something that would doubtless appease competition bodies to a certain extent.
Based on the latest figures from Italian regulator AGCOM, Wind and 3 together would have held a 33.3% share of the mobile market as of the end of September.
At the same date market leader Telecom Italia had a 32.1% share, while Vodafone claimed 27.5%.
