Italy gave final approval to CK Hutchison and VimpelCom to create the country’s largest operator, although the government’s budget plans may throw a spanner in the works.

The operators said they received final approval from the ministry of economic development in Italy for their joint venture combining VimpelCom’s Wind and Hutchison’s 3 Italia, and are on track to complete the deal by the end of the year.

However, the Italian government’s Draft Budgetary Plan 2017 sent to the European Commission last week could mean it is not all smooth sailing.

The plan includes a proposal to raise around €1.8 billion next year by anticipating the renewal of some frequency licences, according to a report in Il Messaggero.

The plan proposes extending concessions on the 900MHz and 1800MHz band spectrum rights held by TIM, Vodafone, Wind and 3 Italia, due to expire on 30 June 2018, to 31 December 2029.

This could mean France’s Iliad abandons its entry into the Italian market, as it may have to pay €300 million, which it said would be a challenge.

The European Union approved the Wind-3 Italia tieup last month and key to this approval was the two companies’ commitment to sell assets to Iliad. If Iliad backs out, the EC may well want to revisit its approval.