Iliad moves CK Hutchison, VimpelCom Italy deal closer to EC approval

Iliad's involvement in a planned merger of CK Hutchison and VimpelCom's Italian assets was tipped to sway European Commission competition regulators towards approving the tie-up.

Two unnamed sources told Reuters that Iliad's plan to acquire network assets being offered by CK Hutchison and VimpelCom as part of a remedy package tied to their plan to merge Three Italy with Wind will be enough to convince EC regulators to clear the deal.

Iliad last week announced it had agreed to acquire the assets being offered under the remedy package, which would effectively clear the way for the France-based operator to set up shop in Italy.

Any operator established by Iliad would ensure that the country remains served by four full MNOs following the merger, overcoming a key concern of the EC about the deal. The EC has recently taken a tough stance on deals that reduce the number of full MNOs in a market from four to three, with CK Hutchison's plan to merge Three UK with O2 UK a recent high-profile example of the EC's approach.

That deal was blocked amid concerns that the reduction in full MNO numbers would lessen competition in the UK and so result in consumers paying higher prices for mobile services.

Iliad's deal with CK Hutchison and VimpelCom would involve the transfer of 2x35 MHz frequencies in the 900, 1800, 2100 and 2600 MHz bands at a cost of €450 million ($496 million) to be paid between 2017 and 2019. The operator also agreed to acquire several thousand macro sites in densely populated areas, to create a RAN-sharing agreement or buy several thousand macro sites in rural areas, and to forge a roaming deal covering 2G, 3G and 4G infrastructure.

The operator's strong track record as France's fourth mobile operator could certainly prove attractive to EC regulators when it comes to assessing its likely potential in Italy.

Iliad sparked a price war in France when it established its Free brand in the market in 2012, and continues to offer competitive tariffs such as one that offers 50 GB of 4G data for €19.99 per month.

The EC is due to issue its final judgement on the Three Italy/Wind merger by Sept. 8, but has also been tipped to reveal the outcome of an initial review by Jul. 19.

For more:
- see this Reuters report
- view Iliad's asset acquisition announcement (PDF)

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