MILAN, March 19 (Reuters) - Telecom Italia (TIM) and Fastweb, the Italian arm of Swisscom, agreed to jointly build up to 6,000 telecom towers in Italy, the two companies said on Thursday. The project,
TIM, Fastweb team up on telecoms towers in blow to Italy's INWIT
Telecom Tower Market Shakeup and Implications for INWIT
By Elvira Pollina
Joint Venture Announcement and Market Reaction
MILAN, March 19 (Reuters) - Telecom Italia (TIM) and Swisscom's Fastweb said they will build up to 6,000 telecom towers in Italy, in a challenge to the country's top mast operator INWIT, whose shares slid 22% after Thursday's announcement.
The plan is a potential blow to INWIT because TIM and Fastweb are its biggest tenants and their move threatens its future growth and leverage in contract talks, analysts said.
Shift in Telecom Infrastructure Strategy
The non-binding TIM–Fastweb deal marks a break from a decade-long trend of telecom operators selling tower assets to raise cash, then leasing back the infrastructure.
TIM and Fastweb said they will be the main customers of the new joint venture, which will be open to other operators and will also enable third-party investors to join later.
Contract Negotiations and Industry Dynamics
Both companies have been trying for months to renegotiate terms of their costly contracts with INWIT, which is resisting the move, two sources with knowledge of the matter told Reuters
The between TIM and Fastweb, which became Italy's leading mobile player after the 8 billion euro ($9.17 billion) buyout of Vodafone operations in the country, comes after the two agreed in January to jointly roll out part of their 5G technology to avoid duplicating investments.
INWIT's Response and Existing Agreements
Milan-listed INWIT told Reuters the deal was an "evolution" of a previous accord between Fastweb and TIM, who are its main customers, adding it has no impact on existing contracts that are due to remain in place until 2038.
The long-term contracts under which INWIT's 25,000 masts across Italy hosts the antennas of the two telecoms operators make up the bulk of the tower company's 1 billion euro revenue.
Market Analysis and Industry Impact
"The agreement is a clear threat to INWIT and comes at a time when the company is already in discussions with its anchor tenants over their respective contracts," analysts at broker Intermonte said in a report.
The initiative could curb TIM and Fastweb's future commitment to developing new sites with INWIT, while also strengthening their bargaining power, Intermonte added.
Background: INWIT and Industry Challenges
Born as a spin‑off of TIM's mobile tower assets, INWIT merged in 2020 with Vodafone's Italian mast business. Fastweb inherited the related contract with INWIT through its acquisition of Vodafone Italy.
Italy's telecom operators are seeking to overhaul their business models after losing nearly a third of their revenue since 2010 and watching post-investment cash flow collapse from 10.5 billion euros to zero, industry lobby Asstel said.
Takeover Speculation and Financial Context
INWIT has been at the centre of market speculation over a potential takeover bid from one of its main shareholders, French infrastructure fund Ardian, which holds a 31% stake.
($1 = 0.8723 euros)
(Reporting by Elvira Pollina; Editing by Gianluca Semeraro, Mrigank Dhaniwala and Alexander Smith)
