Italy is one of Vodafone’s weakest markets, with none of its five mobile operators making a return on their investment according to Vodafone’s CEO
Fastweb, which is owned by Swisscom, apparently is interested in acquiring Vodafone’s Italian business, according to Bloomberg. Fastweb provides fixed, mobile and wholesale access services in the Italian market, although it is the smallest of the country’s five mobile operators with about 4.9 million customers.
The next smallest operator, Free (part of France’s Iliad group) has double that number while third largest, Vodafone Italy, has 17.5 million. Hence a tie-up with Vodafone would give Fastweb’s scale, reach and depth. It would also consolidate the market.
Impossible to make money?
At Vodafone Group’s H1 earnings report, CEO Margherita Della Valle (pictured) noted the operator is “continuing to explore a range of options in Italy” even though it outperformed its rivals in the growth of service revenue and has a strong B2B operation.
Nevertheless, Italy has proved a tough market with capex higher than returns for all players, according to Della Valle, who added, “Prices are below cost so no matter how many efficiencies we drive … the market itself needs action, which is why we will continue to review a range of options.’
According to Reuters, Iliad Group is also thought to be interested in acquiring Vodafone although its offer in early 2022, rumoured to be €11 billion, was rebuffed.
Vodafone Spain, one of the group other weakest opcos, is being sold to investor Zegona for €5 billion, subject to regulatory approval. The group is also waiting for regulatory approval in the UK, where its opco agreed to merge with Three UK in June.