Italy sees fallout from Hutch-VimpelCom merger - Mobile World Live

Italy sees fallout from Hutch-VimpelCom merger

21 NOV 2016

The chief executive of TIM confirmed  plans to launch a low-cost MVNO brand, while merger partners CK Hutchison and VimpelCom are thought to be planning up to 1,500 job cuts.

“In the coming months we will launch a new mobile phone operator with a new brand,” said Flavio Cattaneo, targeted at “cost-conscious” customers and mostly run online with a few retail stores, Milano Finanza reported.

This sounds similar to a report last month that France’s Iliad plans to enter the Italian market by selling lower-cost services online, rather than invest in retail shops, which is where existing operators do much of their business. This is also how it shook up competition in its home market.

Cattaneo said last month he wasn’t worried about Iliad: “Iliad cannot take advantage of the surprise effect and from our side there will be counter measures that are adequate and coherent with our positioning in the market.”

Iliad said it aims to capture up to 15 per cent of the Italian mobile market, and could make its entrance as the country’s fourth operator by early summer 2017.

It will do so with the help of Hutchison and VimpelCom, who committed to selling their assets to Iliad as part of efforts to receive approval from the European Commission for a merger between their Italian units Wind and 3 Italia.

Wind/3 job cuts
The two firms are also planning up to 1,500 jobs cuts in Italy – around 16 percent of total staff – as they prepare to launch their newly merged wireless provider in January, Bloomberg reported.

The new entity will be led by CEO Maximo Ibarra and will use as much as €500 million to fund voluntary redundancy packages in the first half of 2017 that may include payments of as many as four years of annual salary.

Involuntary job cuts are also planned for the future after the voluntary round, said the report.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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