Telecom Italia (TIM) and rival Vodafone Italia have signed an agreement to merge their respective mobile tower infrastructure and to jointly deploy 5G networks in both urban and rural areas throughout Italy. At a presentation in Rome attended by TIM’s CEO Luigi Gubitosi and his counterpart at Vodafone, Aldo Bisio, the partners said their boards had examined the commercial feasibility of the MoU announced in February and had agreed to extend their existing passive network sharing agreement and implement active sharing of 4G networks to enable them to more efficiently roll out new 5G technology over a wider geographic area and at a lower cost. They will also upgrade their mobile transmission networks, adding higher capacity optical fibre cables ("Fibre-to-the-Site" or "backhauling").
Under the deal, Vodafone agreed to transfer its mobile masts to tower unit Infrastrutture Wireless Italiane (Inwit), currently 60 percent owned by TIM, in exchange for EUR 2.14 billion in cash. The company expects synergies of over EUR 800 million and incremental proceeds of over EUR 1 billion to cut debt. TIM said it likewise expected synergies of over EUR 800 million from the deal as well as an annual EUR 200 million improvement in EBITDA by 2026 and a EUR 1.4 billion debt reduction over time.
Joint control of Inwit
The merger means both companies will each have a 37.5 percent stake and equal governance rights in the enlarged Inwit, which will eventually become Italy’s biggest tower company, with more than 22,000 towers throughout the country, as well as the second largest in Europe. TIM and Vodafone added that they will enter into a 3-year lock-up agreement for their respective stakes and will consider cutting their stakes in the merged entity to 25 percent by opening the venture to others.
‘Italy’s biggest tower company’
Gubitosi described the transaction as “key for the country’s infrastructure and technological development,” adding that “thanks to what will become Italy’s biggest tower company, we will be able to offer households and businesses privileged access to the technological revolution that has just begun.” Bisio, meanwhile, said “network sharing reaps the benefits of 5G and at the same time reduces the impact on the environment and lowers rollout costs, allowing more investment in services for customers.”
Third Vodafone network sharing deal
Vodafone has now signed mobile network sharing agreements in the UK, Spain and Italy with a view to cutting heavy investment in 5G. In April it signed a deal with Orange in Spain to extend active network sharing to 5G technology and earlier this month it partnered with O2 (Telefonica) in the UK to expand infrastructure sharing to include 5G active equipment on joint network sites, among other commitments. It has also announced plans to spin off its European tower assets into a new company called TowerCo.
