Vodafone and Iliad reportedly mulling Italian merger

Vodafone and Iliad Telecom, which operates the Free brand, are in talks to merge their businesses in Italy, according to a report by Reuters.

According to the report, talks between the pair are ongoing. Reuters reports that Iliad/Free is working with investment bank Lazard on the future of its Italian operation. 

A combination of Vodafone and Iliad’s Italian operations would create a player with a mobile market share of about 36% and revenues of around €6 billion. Vodafone has a mobile market share of about 23.3% compared with Iliad’s 10.5%. 

Iliad last year indicated that it was moving forwards with plans for fixed-line services in Italy after acquiring consumer electronics distributor Uniero, Those plans are expected to be firmed up with a fixed-line launch this week. 

Vodafone also offers fixed-line services in the country, including pay TV services, with a TV base of around 300,000 customers at the end of September last year. Overall, Vodafone has a 16.5% share of the fixed-line market. 

Analysts at Jefferies said the report indicated the pair are “hopeful that in-market consolidation may be possible in 2022” across Europe, even though EC views of antitrust implications of telecom consolidation have not been tested. 

The latest merger rumours come on top of a report at the end of last year that Vodafone and Orange had engaged in merger discussions over a six months period without results

While Jefferies argues that “in Italy’s fragmented telecom market, it might be challenging to demonstrate that this merger would cause consumer harm”, its analysts also point to the report as further evidence that Vodafone is actively pursuing merger opportunities general.

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