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EU set to clear Italian mobile telecoms merger - sources

Reuters

By Foo Yun Chee

BRUSSELS (Reuters) - CK Hutchison Holdings and Vimpelcom (VIP.O) are set to win EU antitrust approval for their deal to merge their rival Italian mobile network operators after agreeing concessions to help a new competitor break into the market, two people familiar with the matter said on Friday.

Approval of the 21.8-billion-euro (£18.6 billion) deal to merge Hutchison's 3 Italia with Vimpelcom's Wind Telecommunicazioni would be welcome news for the industry after the European Commission blocked Hutchison's similar deal in the UK to merge its Three UK subsidiary with Telefonica's (TEF.MC) O2 UK.

European regulators fear that where such deals reduce the number of mobile network operators in a country to just three competition would be insufficient to keep a lid on prices.

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Combining 3 Italia with Wind would leave Telecom Italia (TLIT.MI) and Vodafone Italia (VOD.L) as the only other mobile network operators in Italy and to address the concerns Hutchison and Vimpelcom have offered to sell some radio frequencies and infrastructure assets to French telecoms operator Iliad (ILD.PA) to help it gain a foothold in Italy.

Founded by maverick French businessman Xavier Niel, Iliad caused a price war in the French mobile market with the its entry four years ago under its TV, telecoms and Internet services brand name 'Free'.

Both the Commission, which is scheduled to rule on the case by Sept. 8, and Iliad declined to comment. Hutchison said it was confident of securing EU approval.

(Additional reporting by Gwenaelle Barzic in Paris and Agnieszka Flak in Milan; Editing by Greg Mahlich)