Swisscom Is Evaluating Tie-Up for Italian Unit Fastweb
(Bloomberg) -- Swisscom AG is considering options for its Fastweb SpA unit, including a sale or partnership, that would increase the Italian business’s market share in mobile services, people familiar with the matter said.
The company has discussed a tie-up with CK Hutchison Holdings Ltd.’s local wireless unit, Wind Tre SpA, though the Hong Kong conglomerate isn’t interested in adding landline services and doesn’t plan to pursue a deal, three of the people said, asking not to be identified because the conversations were private. The conversations took place in the last couple months, according to one of the people.
The deliberations are at an early stage and Swisscom may decide against a deal, the people said. Swisscom agreed to buy Fastweb in 2007 for 3.1 billion euros ($3.6 billion).
A representative for Swisscom declined to comment. A spokesman for CK Hutchison had no immediate comment.
Swisscom shares rose 1.6 percent at 5:01 p.m. in Zurich after earlier gaining as much as 2.3 percent, the biggest intraday gain since June.
The review comes as Italy’s three main mobile carriers -- Wind Tre, Telecom Italia SpA and Vodafone Group Plc -- face mounting competition from a new low-price competitor, France’s Iliad SA. The country’s telecoms have also just agreed to shell out about 6.55 billion euros in an auction for the rights to airwaves that will allow them to build out so-called fifth generation mobile networks.
While Fastweb is focused on offering high-speed Internet and phone services through landline connections, it also offers mobile services. The company reported an 8.3 percent increase in revenue to 1.94 billion euros on 2.45 million wireline customers last year, according to a February statement. Earnings before interest, taxes, depreciation and amortization was 759 million euros compared with 661 million euros in 2016.
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