Iliad to become Italy’s fourth mobile player

France’s Iliad Telecom has signed a deal with Hutchison and VimpelCom to acquire assets that the pair are being forced to sell off to secure approval of the merger of their Italian mobile subsidiaries by the EC.

According to Iliad, which operates in France under the Free brand, the agreement will enable it to launch Italy’s fourth mobile network operator.

The assets in play include the transfer of two blocks of 35MHz of spectrum across the 900MHz, 1,800MHz, 2,100MHz and 2,600MHz ranges for a total of €450 million, to be paid between 2017 and 2019.

Iliad has also secured an agreement covering the acquisition of several thousand macro sites in densely populated areas, either directly from Wind/H3G or rented via third parties, and the sharing of networks in rural areas.

Iliad will be able to operate 2G, 3G and 4G services on the merged network for a period of five years, renewable for a further five years at its own discretion.

The agreement has been submitted for approval by the Commission as part of the approval process of the merger of Italian mobile units H3G and Wind, owned respectively by Hutchison and VimpelCom. A ruling on the merger is expected by September 8.

Iliad majority shareholder Xavier Niel has told the group that he does not hold, directly or indirectly, any matierial stake in Telecom Italia. He said that his interest in the Italian telco currently amounts to less than €25 million in value, and that this will be disposed of in the next few weeks.

Niel was last year reported to have upped his stake in Telecom Italia to over 15% through call options and other positions, leading Vivendi, which at the time held a 20.3% stake in the operator, to issue a denial that it was acting in concert with him to take control of the company.

Iliad’s entry into the Italian mobile market follows its carving out of a significant share of the French mobile business through aggressive pricing over the last few years. Iliad in France offers a quad-play of fixed and mobile broadband and telephony, and TV services.