5G towers are big business, and on Friday, Vodafone and Telecom Italia (TIM) successfully secured conditional EU antitrust approval from the European Commission to combine INWIT’s passive network infrastructure with Vodafone Italy’s towers. This will create Europe’s second largest listed mobile towers company, with over 22,000 towers, from which to roll-out 5G networks.
5G tower utilisation
As part of the deal, announced in July 2019, Vodafone will transfer its Italian mobile masts to INWIT, which is 60% owned by TIM. Under the commitments, INWIT has agreed to make space available to third parties on 4,000 of its towers in more urbanised areas while committing to preserving existing tenancies. The commitments ensure that INWIT can maximise tower utilisation while preserving the ability of Vodafone and TIM to efficiently roll out their respective 5G networks.
“The European Commission has confirmed that it is supportive of TIM and Vodafone’s plans to share active network equipment outside of major cities, allowing a faster deployment of 5G over a wider geographic area, at a lower cost, and with a lower environmental impact,” said TIM in a press statement.
The active sharing partnership will exclude municipalities with populations of over 100,000 inhabitants, as well as their more densely populated suburbs.
Vodafone to receive €2,140 million
The combination is expected to take place by the end of this month with Vodafone receiving proceeds of €2,140 million and both Vodafone and TIM each holding a 37.5% shareholding in INWIT.
The telecoms industry often favours deals like tower or network sharing over clear mergers as they are generally seen as a good way to reduce dent and share costs. They also bypass EU antitrust regulators’ objection to mergers that reduce the number of companies in a telecoms market.
“This agreement will enable us to step up the rollout of 5G for the benefit of our customers and the community as a whole," said Aldo Bisio, CEO of Vodafone Italia. "5G has a key role to play in modernising the country. It will provide the technology platform from which to launch innovative new services capable of making business models more efficient and improving productivity throughout the value chain, helping to build a more competitive digital economy. 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.”