Advertisement

Tim and Vodafone together for the 5G, and not only. Founded the largest tower company in Italy

Advertisement

Published on Jul 26, 2019

Advertisement

Tim and Vodafone together for the 5G, and not only. Founded the largest tower company in Italy

Following the press release on the 21st of February 2019, TIM and Vodafone have today signed the agreements on the extension of the current agreement of sharing of passive infrastructure with INWIT and for the sharing of the active component of the mobile network.

About the project-sharing of the active components of the network, TIM and Vodafone will develop a joint infrastructure for 5G for a more efficient implementation of the new technology on a wider geographic area and at a lower cost.

For Vodafone, the agreement will result in synergies of more than 800 million, in addition to the indirect benefits deriving from the synergies of INWIT. Vodafone will also receive a fee of 2,140 million and expects to receive the proceeds of the incremental time equal to more than 1 billion euros to be used to reduce debt.

For TIM the financial effect of the expected synergies will be in the order of over 800 million euros in addition to the synergies estimated for the new INWIT in terms of improvement in Ebitda to € 200 million per year by 2026, thanks to synergies, the activities under contract and new opportunities while the effect of the deleverage on the debt is expected in time a decrease of over 1.4 billion euros.

This will significantly reduce the gap in technological development between large urban centres and the rural areas of the Country and will accelerate the development of innovative solutions for the enterprises.

The two companies will identify the best technical and commercial for the installation joint of their active equipment 5G, with the exclusion of large cities, assuring a larger and more widespread diffusion of the new technology on the national territory. Both companies will maintain separate management of its allocation of frequencies and the control of the quality and functionality of your network, providing the flexibility to innovate and compete on the market to meet the needs of their respective customers.

TIM and Vodafone will share also the active equipment of their respective 4G networks exist to support the active sharing of the network 5G. In addition, Vodafone and TIM will be required to adapt their respective networks mobile transmission, through the use of fiber-optic cables of high capacity (“Fiber-to-the-Site” or “backhauling”), to fully benefit from the features of the 5G, as the increased speed and low latency, allowing for greater economies of scale.

In parallel, the two companies will extend the current agreement of sharing of infrastructure, passive network, from the current 10,000 sites at a coverage on a national basis, with the aim of strengthening the development of technology for 5G, and make more efficient use of the network infrastructure, both in areas, both urban and in rural areas.

The agreement also provides for a corporate operation divided into several phases, aimed at the consolidation of the passive infrastructure of the Vodafone network in INWIT, which was to become the largest Towerco italy, with a portfolio of over 22,000 towers distributed on the whole national territory, and the second at european level.

Vodafone will merge its passive infrastructure of the network in a new company that later will be built in the INWIT. Prior to the merger, INWIT will acquire a share of the new company so that the shares that Vodafone will receive with the merger will bring Vodafone and TIM have the same participation of 37.5% in the capital of INWIT and equal rights, governance, controlling jointly INWIT through the stipulation of a shareholders ' agreement.

The parties sign an agreement to lock-up three-year of their respective investments and will evaluate a reduction of their participation up to 25% each.

Currently INWIT is subject to the direction and coordination of TIM. After the merger, Vodafone and TIM does not exert any direction and coordination on INWIT, and they will control jointly the company.

The transaction is subject to approval at the meeting by minority shareholders of INWIT (c.d. the procedure of “white wash”) and, therefore, does not provide public purchase offer on the shares of INWIT. In addition, the operation does not involve the withdrawal for the shareholders of the company.

The overall operation will be completed once you have obtained the necessary permissions.

Luigi Gubitosi, managing Director of TIM, commented: “The conclusion of this operation is essential for the infrastructural and technological development of the Country and will further accelerate the introduction of 5G, which already sees Italy as one of the most advanced countries in the testing of this new technology. Thanks to what has now become the first Tower Company, we can offer families and businesses a privileged access to the technological revolution that has just begun. INWIT will support as well the economic and industrial development of the Country that will be able to better exploit the opportunities offered by the new digital economy”.

Aldo Bisio, ceo of Vodafone Italia, commented: ”This agreement allows you to accelerate the strategy of development of the 5G for the benefit of our customers and the entire community. The 5G represents a key infrastructure for the modernization of the Country. A technology platform that opens the way to a new era of services that will make the most efficient business models and improve the productivity of all the supply chains, creating the foundations for a digital economy more competitive. The model of sharing it enhances the benefits of the 5G, and at the same time reduces the impact on the environment and implementation costs, allowing greater investment in services to customers”.

Advisors of the transaction were Banca IMI, Bank of America Merrill Lynch and Goldman Sachs as financial advisors TIM; Gianni, Origoni, Grippo, Cappelli & Partners as legal adviser to TIM, and UBS as financial adviser to Vodafone and NCTM legal advisor of Vodafone.

In summary:

Advertisement

Advertisement

image

Hey friend

Your blog talks about Tim And Vodafone Together For The 5G, And Not Only. Founded The Largest Tower Company In Italy? Contact Us to be indexed in the BitFeed Network