Swisscom makes wholesale access commitments to secure the AGCM’s approval and strengthen its position in Italy, as Vodafone completes European “rightsizing”
Vodafone has now left Hungary, Italy and Spain but bolstered its operations in the UK
On 31 December 2024, Swisscom completed its takeover of Vodafone Italia for €8bn (£6.6bn) in cash. As part of the transaction, Swisscom and Vodafone have entered into an agreement whereby the latter will continue to provide certain services to Vodafone Italia for a period of up to five years. Vodafone has stated that proceeds from the sale of its Italian business will be used to reduce net debt at the group level, with the board targeting to return up to €2bn (£1.7bn) to shareholders. According to Vodafone, the deal also represents the “final step” in the reshaping of its European footprint – the other steps being the merger with Three in the UK and the sale of Vodafone Spain to Zegona, both of which follow an earlier exit from Hungary in 2022. Vodafone has not been successful in every recent M&A attempt, however, with the Autoridade da Concorrência (AdC) prohibiting its proposed acquisition of cableco Nowo in Portugal.
The AGCM had flagged concerns that Swisscom’s acquisition of Vodafone Italia could harm competition in wholesale broadband
The Swisscom/Vodafone Italia deal was announced on 15 March 2024 and soon after received unconditional approval under Italy’s Golden Power legislation from the Presidency of the Council of Ministers, which determined that it would not pose a risk to national security, as well as from the Swiss Competition Commission and the EC under the Foreign Subsidies Regulation. The proposed acquisition was then formally notified to the Italian competition authority – Autorità Garante della Concorrenza e del Mercato (AGCM) – on 12 August. Around a month later, the AGCM opened an in-depth investigation under national merger control rules, stating potential concerns that the acquisition could create a dominant player in the fixed-line wholesale access market and in the supply of retail services to residential, public administration and corporate customers. While remaining convinced that the transaction would be pro-competitive (specifically by creating a stronger converged challenger to TIM), Swisscom pledged to work “closely and constructively” with the AGCM to secure its timely clearance.
The transaction received the green light based on a package of four commitments
Upon completing its investigation, the AGCM decided to clear the deal based on a set of four commitments from Swisscom:
Wholesale access services on the Fastweb network to allow competing operators to provide retail services to business and public administration customers;
Transparency of information for any public tenders involving Fastweb and Vodafone Italia;
Wholesale access from Fastweb (via FiberCop) to enable competing operators to provide retail services to residential customers; and
Appointment of a monitory trustee to oversee compliance with the remedies.
Having secured competition authority approval, Swisscom will now begin integrating the networks of Vodafone Italia and its local subsidiary Fastweb. According to Swisscom, the merged entity – currently being referred to as ‘Fastweb + Vodafone’ – will help sustain investment in the Italian telecoms market through increased scale, a more efficient cost structure and significant annual run-rate synergies of ~€600million (£496m).
