The Commission gave the green light to the INWIT venture, subject to conditions.
Background: TIM and Vodafone initially announced an active network sharing partnership for 5G in February 2019. This led to the creation of INWIT in July 2019, a company in which the two operators will combine the respective passive networks, creating Italy’s biggest tower company and the second largest in Europe, with more than 22,000 towers. Initially they will hold shares of 37.5% each, and after a three-year ‘lock-up’ period they will be able to consider reducing them to 25% each. In January 2020, the deal was notified to the European Commission, which was scheduled to decide in February 2020 but delayed its decision due to concerns it had.
The EC imposes conditions on the venture: On 6 March 2020, the EC accepted the commitments offered by the operators to address the concerns. The EC believed that the transaction, as originally proposed, would have reduced competition in the market for renting space on towers in Italian municipalities with more than 35,000 inhabitants. As a consequence, it would have also excluded telecommunication operators from the retail market in those municipalities. This would concern in particular operators already active, or likely to enter the Italian market in the near future, that need to roll out their network. To address these concerns, TIM and Vodafone offered space on 4,000 towers on non-discriminatory terms to third parties. INWIT will adopt a procedure to timely respond to third parties, and a fast-track dispute resolution mechanism with an independent expert to adjudicate on it. Finally, the operators refrain from exercising any early termination rights in all existing hosting contracts, and will offer the opportunity to extend those contracts.
Good news for Iliad: The conditions imposed by the EC on the joint-venture will be good news for Iliad, the operator last to enter the Italian market. With another network sharing JV in the making (between Fastweb and Wind Tre) the operator would have been the only one left out in Italy, with potentially disruptive consequences. Iliad is challenging the Fastweb–Wind Tre venture, with courts scheduled to decide in October 2020.
