Fastweb’s Mobile Push Breaks Italy Telecom’s Consolidation Dream

(Bloomberg) -- Swisscom AG’s Italian unit Fastweb is becoming the fifth wireless carrier in an industry that had aimed to reduce the number of mobile phone players in a bid to fight shrinking revenue.

Italy’s Development Ministry awarded Fastweb the license last week, a company representative said. Fastweb, which offers high-speed internet services to consumers and businesses wants to attract more lucrative subscribers from rivals such as Telecom Italia SpA and Vodafone Group Plc in one of the world’s most competitive mobile markets.

Fastweb had already provided mobile service by renting space on Telecom Italia’s network. Now, it plans to build its own infrastructure. The company paid about 200 million euros ($223 million) for mobile spectrum and towers from Tiscali SpA last year and then bought 5G frequencies for 32.6 million euros. In June, Fastweb also reached a deal with CK Hutchison Holdings Ltd.’s Wind Tre to share investments to build 5G networks in Italy.

Fastweb’s move goes against the consolidation trend in the Italian telecomunications industry that started in 2015, when VimpelCom Ltd. and Hutchison reached a deal to combine their Italian businesses. Between 2013 and 2018, the Italian mobile industry lost 2.4 billion euros of revenue due to a price war among service providers, according to the country’s communications regulator Agcom.

When Wind and Tre agreed to merge, industry executives hoped consolidation would ultimately cut the number of Italian carriers to three from four.

Instead, France’s Iliad SA, one of Europe’s most aggressive phone carriers in term of pricing, entered the Italian market last year following a request by the European regulator to maintain competition.

To contact the reporter on this story: Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Dan Liefgreen

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