Iliad Group and Vodafone Group began discussions over a merger of their operations in Italy, seeking ways to end cut-throat competition in the market, Reuters reported.
The news agency reported discussions are ongoing. It added Iliad Italia is also expected to introduce fixed services from tomorrow (25 January). Sources told Reuters the French-headquartered operator is working with investment bank Lazard on its strategic plans for the country.
Iliad’s entry to Italy in 2018 kicked-off a fierce contest with incumbent mobile operators.
The Italian business generated revenue of €674 million in 2020 while Vodafone Italia brought around €5 billion in the financial year to 31 March 2021.
Reuters noted any deal would create a group with a 36 per cent share of the mobile market.
Any merger would require regulatory approval from Italy and the European Commission. Efforts to reduce the number of operators from four to three within European Union member states have not always been successful, however.
Worth noting is Iliad was able to enter the Italian market on the back of the merger of Wind and CK Hutchison’s 3 Italy to create WindTre. To get the original deal through the European Commission, the two agreed to sell assets to the French company.
CK Hutchison has since lamented continued intense competition in Italy, which it blamed for a drop in revenue and customers at its largest division. Telecom Italia, meanwhile, faces a near €11 billion takeover bid by US investment group KKR.
Vodafone Group CEO Nick Read has called for consolidation between players in Europe to help the industry return to growth.