CK Hutchison Group Telecom (CKHGT) inked a deal with EQT Infrastructure to create a standalone business housing Italian operator WindTre’s active network equipment and wholesale service units, with the private equity company set to take a majority share.

The announcement follows lengthy speculation on a potential deal between the pair.

Under the agreement EQT will own 60 per cent of the new business with the operator group holding the remainder. Each stakeholder will appoint two executives to a four-person board running the JV.

The enterprise value of the new company has been pinned at €3.4 billion.

In a statement CKHGT highlighted the move is in line with its “asset light” strategy to improve operational efficiencies, while allowing the rest of the WindTre business to focus on its core products for retail customers.

As part of the deal, WindTre will sign a long-term deal to use the assets being spun-off into the independent business, which include mobile and fixed wholesale services. Once up-and-running, the new entity is expected to target B2B customers and IT service providers for IoT, public network and 5G projects.

The agreement with EQT is subject to regulatory approval and is expected to close in six-to-nine months.

CKHGT’s announcement comes days after it released its latest batch of financial results showing continued declines in revenue its WindTre unit, which has been frequently referred to by the company as suffering from the intensely competitive nature of the Italian market.