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September 2, 2016

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Hutchison, VimpelCom to merge Italian assets

THE European Union yesterday cleared a mobile phone tie-up between Hong Kong’s Hutchison and Russia’s VimpelCom in Italy after they agreed to sell some of the business to boost competition.

Hutchison, owned by Hong Kong tycoon Li Ka-shing, and VimpelCom agreed last year to merge their 3 Italia and Wind networks but the European Commission demanded they make room for new entrants in the Italian market.

In July, France’s Iliad, parent company of low-cost operator Free, said it would acquire frequencies and radio towers from Hutchison and VimpelCom.

The commission, which polices European Union competition policy, said “the effective structural remedies offered by Hutchison and VimpelCom fully address the commission’s competition concerns.”

“They will ensure the market entry of French telecom operator Iliad as a new mobile network operator in Italy,” it said in a statement.

“This means that the parties can grow and reap the benefits of combining their assets, whilst Italian mobile customers will continue to profit from effective competition.”

Approval was particularly important for Hutchison after the commission decided in May to block its 14 billion euro (US$15.6 billion) acquisition of Telefonica’s O2 mobile unit in Britain on the grounds it would harm competition.

VimpelCom’s Wind business currently ranks third in the Italian market and Hutchison fourth, but together they will become the largest entity ahead of Telecom Italia’s Tim and Britain’s Vodafone.


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