TIM and Vodafone announce active network-sharing agreement, expand passive sharing deal

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Vodafone and Telecom Italia Group (TIM) have announced an active network-sharing partnership for 4G and 5G, and expanded their passive-sharing agreement.

The active network-sharing agreement is expected to enable faster deployment of 5G over a wider geographic area in Italy, at a lower cost.

TIM and Vodafone will pursue active network-sharing for their existing 4G networks, to facilitate 5G active network sharing. Further, the partners plan to upgrade their respective mobile transmission networks, adding higher-capacity optical fibre cables.

As part of the deal, Vodafone will also transfer its passive tower infrastructure in Italy to INWIT, which is 60% owned by TIM. Vodafone will receive a cash consideration of €2,140 million.

The two companies will extend their existing passive sharing agreement from the current 10,000 sites to achieve nationwidecoverage. They say this will help to use their network infrastructure more efficiently, both in urban and rural areas.

Through the agreement, INWIT will become Italy’s biggest tower company, and the second largest in Europe, with more than 22,000 towers throughout the country.

TIM and Vodafone Vodafone will each have a 37.5% stake in the combined entity, which will remain listed on the Milan Stock Exchange. Both companies say they will consider jointly reducing their respective ownership levels to a minimum of 25% in the future.

Accelerating 5G

Aldo Bisio, CEO of Vodafone Italia, said, “This agreement will enable us to step up the rollout of 5G for the benefit of our customers and the community as a whole. 5G has a key role to play in modernising the country.

It will provide the technology platform from which to launch innovative new services capable of making business models more efficient and improving productivity throughout the value chain, helping to build a more competitive digital economy.

Network sharing reaps the benefits of 5G and at the same time reduces the impact on the environment and lowers rollout costs, allowing more investment in services for customers.”

Luigi Gubitosi, CEO of TIM, said, “Completion of this transaction is key for the country’s infrastructure and technological development and will enable us to further accelerate the deployment of 5G, with Italy already among the countries taking a lead in trials of this new technology.

Thanks to what will from today become Italy’s biggest tower company, we will be able to offer households and businesses privileged access to the technological revoOrange Belgium and Proximuslution that has just begun.

INWIT will in this way support the country’s economic and industrial development, enabling Italy to fully exploit the opportunities offered by the new digital economy.”

Both companies will use the proceeds from the transaction to cut debt. The deal is expected to complete during the first half of 2020, subject to regulatory and shareholder approval.

Industry trends

The announcement follows the recent launch of several European network-sharing collaborations, including between Vodafone and O2in the UK; ; Orange and Vodafone in Spain;Fastweb and Wind Tre in Italy; and Tele2 and Bite in Latvia and Lithuania.

Meanwhile in the UK, Vodafone announced late last week that it is to hive off its mobile mast estate in Europe into a new firm that it could list on the stock market.