Private equity firm EQT recently announced a deal that will result in them acquiring a 60% stake in a newly formed company, created to own and operate Italian operator Wind Tre’s fixed and mobile network assets. This new company will take ownership of Wind Tre’s radio antennas, base stations, transport network, and associated contracts, offering the network to customers on an independent wholesale basis. Wind Tre, on the other hand, will retain access to the infrastructure as an anchor tenant of the new business.
The deal’s enterprise value is estimated to be around €3.4 billion, and as per Wind Tre, this deal will enable them to concentrate on serving their retail customers and generating new revenue streams beyond their core fixed and mobile offerings. Canning Fok, Group Co-Managing Director of CK Hutchison, elaborated on the advantages of the deal, explaining that it is part of the company’s “asset-light strategy” to recoup the cost of network investment. He also mentioned that Wind Tre will benefit from partnering with EQT, a reputed investor in the infrastructure investment space, and maintaining a state-of-the-art network, which will be advantageous to customers while providing certainty on its cost base for OPEX and CAPEX.
However, this deal will be subject to regulatory approvals, and the companies aim to close it around the end of the year.
Italy has long been a highly competitive telecoms market, with Iliad Italia’s entrance in 2018 triggering an aggressive price war in the mobile sector that continues to this day. Operators have since struggled to achieve sustainable growth, especially given their expensive network rollouts and the challenging global economic landscape.
Italy’s largest operator, TIM, has also been exploring ways to monetize its network assets for several months. New CEO Pietro Labriola has developed a plan to spin off the company’s infrastructure unit into a separate entity. Currently, TIM has received offers from both KKR and a partnership of the CDP Equity and Macquarie for a stake in this spun-off NetCo. They announced a formal competitive bidding process back in March, with bidders expected to submit improved offers by June 9.
As the Italian telecommunications landscape evolves, it will be interesting to see how Wind Tre and TIM manage their infrastructure assets and the potential impact on Italy’s telecoms market.
