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Commission approves merger of Three and Wind mobile services in Italy

The European Commission has approved a joint venture between Hutchison and VimpelCom in Italy, allowing the merger of the Wind and Three mobile telecoms operators. 02 Sep 2016

Three and Wind are currently the third and fourth largest mobile companies in Italy, and the Commission had concerns that the transaction would have harmed competition, it said. However, the two companies have offered structural remedies that will allow French operator Iliad into the Italian market, the Commission said.

Iliad will buy some of the joint venture's mobile radio spectrum, and will share several thousand base stations with Three and Wind. A transitional agreement giving access to 2G, 3G and 4G and other technologies will allow Iliad to use the joint venture's network to offer mobile services until it has built its own mobile network.

Commissioner Margrethe Vestager, in charge of competition policy, said: "This case shows that telecom companies in Europe can grow by consolidation within the same country, provided effective competition is preserved. It also shows they can grow by cross-border expansion, such as Iliad in this case."

The Commission blocked a proposed merger between Three and O2 in the UK in May. The proposed £10.25 billion deal, which would have seen Hutchison purchase O2 UK from Spain's Telefónica, would have "significantly reduced competition" in the UK mobile market, the Commission said.

Hutchison offered a range of remedies to address competition concerns, including letting one or two mobile virtual network operators share access to the network of the combined Three/O2 business. It also said it would offer Virgin Media the chance to share the network capacity of the merged business. However, the Commission said the package of remedies on offer was not adequate to address its concerns.