EC green lights Wind-3 Italia merger 

The European Union’s antitrust authorities have approved the merger of Italian mobile operators Wind and 3 Italia after parent companies VimpelCom and CK Hutchison agreed to free up assets to help France’s Iliad create a fourth network operator. The entry of Iliad was key to securing the European Commission’s approval after it blocked CK Hutchison's proposed merger of its 3 UK subsidiary with Telefonica's O2 UK earlier this year.

"We can approve the deal because Hutchison and VimpelCom have offered a strong remedy that enables a new mobile network operator, Iliad, to enter the Italian market," said EU competition commissioner Margrethe Vestager, going on to add that: "This case shows that telecom companies in Europe can grow by consolidation within the same country, provided effective competition is preserved. It also shows they can grow by cross-border expansion, such as Iliad in this case."

The merger deal was first announced over a year ago and is set to create Italy's largest mobile operator with over 31 million mobile customers, although the combined Wind-3 Italia entity will remain behind rivals Telecom Italia (TIM) and Vodafone Italia in terms of annual revenues, which came to a joint EUR 6.25 billion in FY15.

The EC said Hutchison and VimpelCom offered remedies that fully addressed its concerns, including a commitment to sell radio frequencies in the 900 MHz, 1800 MHz, 2100 MHz and 2600 MHz bands, and share or transfer several thousand mobile base station sites to Iliad. A transitional agreement will give Iliad access to the merged entity’s 2G, 3G, 4G and other new technologies until it builds up its own network.

Iliad is aiming for a 10 percent share of the Italian market, according to a recent statement by its CEO Maxime Lombardini. The company is keen to capitalise on the experience it has acquired in France, where it also launched a fourth mobile network operator under the brand Free back in 2012, leading to a serious shake-up of the market, the consequences of which are still being felt.

In a joint statement, CK Hutchison and VimpelCom welcomed the EC’s approval, saying the joint venture will unlock EUR 7 billion of investment in Italy’s digital infrastructure, with consumers benefiting from significantly increased download speeds and 4G coverage, greater reliability and stronger competition.
The companies confirmed that the merged entity will have over 31 million mobile customers and 2.8 million fixed line customers, of which 2.5 million are fixed broadband customers. The transaction is expected to complete in the final quarter of the year.

Source:Telecom Paper