Nine thousand employees, revenues of 7 billion euros and 33 million mobile customers. Here is the “new” group in the risk of Italian telecommunications. At dawn, before the markets opened, the confirmation arrived: Swisscom acquires Vodafone Italia, integrating it with Fastweb. Thus was born a telephony giant that would become the main telecommunications operator in Italy. Consequences? The duopoly (Tim-Vodafone/Fastweb) may not be good for consumers' pockets, but such a strong player could bring economically interesting offers for customers.
The deal, in short. Swisscom has entered into binding agreements with the Vodafone Plc group for the acquisition of 100% of Vodafone Italia for 8 billion euros. Cash operation, financed by debt. The activities of the British group will be integrated with Fastweb, Swisscom's subsidiary in Italy. The agreement is expected to close within the first quarter of 2025, following the approvals of the Antitrust authorities. The Vodafone brand will not disappear immediately. The Swiss group will be able to use it in Italy for five years, paying an annual fee of 350 million at the beginning, which then decreases year after year.
The merger of Vodafone Italia into Fastweb creates a group with around 9000 employees, revenues of 7.3 billion euros (2.6 billion from Fastweb and 4.7 billion from Vodafone Italia) and 33 million mobile customers. Vodafone leaves Italy after over 20 years, when it entered by buying Omnitel. The Englishman did the same operation in Spain, thus collecting a total of 12 billion in cash. On the other hand, Swisscom strengthens its presence in our country, where it landed in 2007 through Fastweb, which in the last ten years has recorded an increase of over 50% in customers, turnover and adjusted EBITDA.
Today we all remember back to 2016, when Wind and Tre merged. But uniting Vodafone and Fastweb means the rise on the market of a group that will have 32% of the market share on the mobile front (with 33 million customers), 34.7% of the mobile market FTTC fiber (Fiber to the Cabinet) and 36% of FTTH fiber (Fiber to the Home). It means dominance in the ultra-broadband sector.
Is this good or bad news for customers? There are two aspects to take into consideration. On the one hand, the merger reduces the number of telephone operators in the Italian market, with an inevitable impact on competition. At the time, Italy was one of the European countries with the lowest costs in mobile telephony precisely because no operator was able to reach the 30% market share. Now the question changes. On the other hand, however, a very large new operator comes into play, probably with the strength to offer acustomers commercial proposals at lower prices (at least in the first period).
For Italian private customers, the merger will bring the new group to 32% in mobile, surpassing the current dominance of Tim which holds 27.9% of the market. But the sector will remain fragmented, with Iliad for example ready to take advantage of it. There will be an important concentration on the fixed network. The new group should exceed 30% of customers, still behind Tim which today has 40% and ahead of Wind Tre which has 14%. The risk here is rising prices due to the duopoly. Similar consequences can occur in business services. Vodafone is growing and Fastweb already has 35% of the market. And on broadband the lead is secure. The merger could put the new group in first place, forcing Tim to react and becoming a “fight” between just two operators. The “duopoly” risk was also clearly expressed by the CEO of Iliad, who tried in vain to tie the knot with Vodafone in recent months. “There is a risk of a duopoly in B2B, we are worried,” said Iliad Group CEO Thomas Reynaud a few hours before the announcement of the agreement with Swisscom.
