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Vodafone eyes minority stake in Fastweb amid Italian market shuffle- Republic World

Updated February 27th, 2024 at 14:41 IST

This move comes amidst broader discussions aimed at consolidating operations in Italy’s competitive telecom sector. 

Vodafone eyes minority stake in Fastweb amid Italian market shuffle
| Image:Reuters

 

Vodafone eyes stake in Fastweb: Telecommunications company Vodafone is set to secure a minority stake in a merged entity with Swisscom’s Italian subsidiary, Fastweb.

The move comes amid broader discussions aimed at consolidating operations in Italy’s competitive telecom sector, according to sources familiar with the ongoing negotiations.

Vodafone’s pursuit of a partnership with Fastweb signifies a tactical retreat from its previous stance, notably after dismissing a joint venture proposal from telecom rival Iliad aimed at establishing a 50:50 partnership.

Under the proposed arrangement, Vodafone would transfer its stake into the new entity, a strategic manoeuvre designed to offload debt from its balance sheet.

The development is part of a broader strategy by telecom operators in Italy to navigate a market facing declining revenues and profit margins, challenging the sector’s investment returns.

The potential Vodafone-Fastweb merger is set to create Italy’s second-largest broadband provider, expanding its footprint in the business customer segment.

Meanwhile, analysts suggest that while this deal may present fewer regulatory obstacles compared to a tie-up with Iliad, it might also yield lower synergies.

The backdrop to these discussions includes Iliad’s continued push for consolidation across Europe’s telecom landscape, highlighted by its recent acquisition of a significant stake in Sweden’s Tele2.

Additionally, Vodafone’s strategic recalibration in Italy marks the latest in its efforts to streamline its European operations, following a merger in Britain and the divestiture of its Spanish business.

CEO Margherita Della Valle has stressed Italy’s unique market challenges, despite Vodafone’s competitive strengths in the region.

(With Reuters Inputs)



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