ZTE set for €1bn order from Wind/Three

By:
Alan Burkitt-Gray
Published on:

Chinese vendor ZTE is expected to win the €1bn contract to build a new network for the Wind/Three merger in Italy

The new Italian operator that has been created from a merger of Wind and Three is expected to order an upgrade worth up to €1 billion from Chinese vendor ZTE.

According to reports from Italy, the so-far unnamed merged operation will give ZTE a contract to replace existing network equipment with a single 4G network.

The merger, which completed in November, has created a new company that is a 50-50 joint venture owned by VimpelCom and CK Hutchison.

No deal has yet been signed, according to reports from Corriere Comunicazioni and Reuters. Corriere Comunicazioni suggested the ZTE deal could be worth from €800 million to €1 billion. Reuters said “around €1 billion”.

The merger, valued at €7.9 billion, received final regulatory approval in October. The new company is set to become potentially the largest mobile operator in Italy, with a market share of 36%, slightly above TIM’s 35%. Vodafone has 29%. In the fixed market, Wind/Three will be in second place to the dominant TIM, which has 50%. The new company will have 16%, with Swisscom’s Fastweb at 15% and Vodafone at 13%.

In order to secure approval for the merger Three and Wind agreed to sell spectrum and mast access to French company Iliad for €450 million so that it could set up a new fourth mobile operator.

Wind, owned by VimpelCom, currently uses Huawei, Nokia and Ericsson mobile equipment. Three, owned by CK Hutchison, is an Ericsson user.