Union questions job security
Italy’s top ranked mobile operator, CK Hutchison-owned Wind Tre is continuing the trend for disposing of network infrastructure with a plan to sell a 60% stake to Swedish investment fund EQT. The MNO informed notified trade unions of the plan a month after the first reports emerged of an asset sale. The divestment of six-tenths of the network unit should be completed by October 1 with 2,000 of the company’s 6,500 employees in Italy being re-employed by the Swedish equity firm EQT’s new network business.
The last 40% of the separated network’s company will be held by owner CK Hutchison, via CK Hutchison Group Telecom Italy Investments. All mobile network operators are stifled by cut-price competition that ruins their returns on the painful investment they sank into a fifth-generation mobile grid. Wind Tre’s infrastructure business is a mostly active mobile network comprised of antennae linking into a backbone that carries both backhaul and landline network.
Though Spinning off the network could pave the way to M&A deals, including a potential sale of the infrastructure business, according to Reuters’ Italian inside sources.
In April 2022 CEO Jeffrey Hedberg (pictured below) after a shareholder meeting and more cuts were on cards. Interesting the assets being sold off are not passive units such as telecom masts, but sophisticated hardware that makes up fixed and radio network access and the units of the transport layer of the comms stack.
According to Telecoms.com Wind Tre faces could industrial action over the plan to spin off its mobile network as the Italian union Fistel CISL is not satisfied by the likely outcome of the restructuring. Fistel CISL said Wind Tre’s plan is ‘a technological impoverishment of the country’s second-largest telephone operator, that has probable repercussions [for] employment.’ The union plans to fight back against the proposals.
The Wind Tre operation itself is the result of a history of mobile mergers, acquisitions and strategic divestments. Italian mobile operator Andala was launched in 1999 and then acquired by what was then Hutchison Whampoa and renamed H3G/Three Italy in 2000. Elsewhere, Wind was established in late 1997 by Enel, France Télécom (now Orange), and Deutsche Telekom and sold in 2005 to Weather Investments and then Veon in 2011. CK Hutchison then acquired part of Wind in 2016 and renamed it Wind Tre, before acquiring the entire company in 2018. It also includes the spin-off brand Very Mobile.
Equity specialist EQT has not offered any explanation of how it intends to manage the proposed deal. It was recently reported in Data Center Dynamics that it could be buying Global Switch, a multi-national data centre operator, for this purpose.