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Vodafone, TIM strike network-sharing dealVodafone, TIM strike network-sharing deal

Italian tower assets, including active equipment, to be pooled in a joint venture as operators seek ways to reduce costs ahead of further 5G-related investments.

Iain Morris

July 29, 2019

1 Min Read
Vodafone, TIM strike network-sharing deal

Vodafone and Telecom Italia (TIM) have formalized a network-sharing agreement that had been in the works ever since Italy's costly 5G spectrum auction last year.

The two operators announced late Friday they would pool their combined 22,000 mobile towers in Telecom Italia's Inwit subsidiary and share the "active" 4G and 5G equipment used at these sites. Each operator will have a 37.5% stake in Inwit and the option of further reducing its stake to just 25% by attracting new investors. Vodafone will receive a payment of €2.14 billion (US$2.4 billion) from Telecom Italia under the arrangement and expects to realize cost savings of €800 million ($890 million) during the next ten years.

Telecom Italia is eyeing a €1.4 billion ($1.6 billion) reduction in net debt, which totals about €25 billion ($27.8 billion) currently, as well as €800 million ($890 million) in ten-year cost savings. Each operator spent about €2.4 billion ($2.7 billion) on new 5G licenses last year -- way more than analysts had expected -- and has subsequently been under pressure to slash expenses in the fiercely competitive Italian telecom market.

Besides allowing the operators to reduce spending on equipment, the tie-up should support headcount reductions. The deal was announced shortly after Vodafone unveiled plans to set up a new European towers company that could be worth more than €18 billion ($20 billion), based on the company's estimates.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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