Vodafone and TIM forge an agreement to share sites where towers for 4G and 5G networks are hosted. How the Italian market is changing
TIM and Vodafone shake up the fledgling 5G market by signing an agreement whereby they join forces to save money and raise the quality of service provided to users. The partnership, focused mainly on the towers that house the antennas, also includes collaboration for 4G.
Today's signing follows the pre-agreement already communicated last February 21. The two companies will proceed to "share the active component of the 5G network, share the active equipment of the 4G network and expand the current agreement to share passive network infrastructure." Put simply, the largest Italian "Tower Company" (and the second largest in Europe) is about to be born, which, at the end of the operation, will be able to count on more than 22 thousand towers for the transmission of the telephone signal. Both TIM and Vodafone, moreover, will have great economic advantages from this collaboration.
The new INWIT
At the heart of the operation is INWIT, Infrastrutture Wireless Italiane SpA. This TIM subsidiary is the company that owns and manages radio transmission equipment, for telecommunications and the broadcasting of television and radio signals at its sites. As a result of the agreement Vodafone will acquire 37.5% of INWIT, leaving the same percentage in the hands of TIM. TIM and Vodafone will have equal governance rights over the new INWIT, but the two companies will continue to manage their frequencies separately.
Benefits for all
This complex transaction benefits everyone a bit: Vodafone will receive €2.14 billion from TIM, TIM will save €800 million, their respective customers over time will have a more efficient service and, above all, more widespread 4G and 5G coverage even in areas far from large urban centers. In addition, Vodafone will be able to earn 1 billion euros more than expected over time, while TIM will be able to save over 1.4 billion on its debt. Finally, the operation also includes the adaptation of the current mobile transmission networks with the use of fiber optic cables with higher capacity (with the so-called "Fiber-to-the-Site" technology), to maximize the typical advantages of 5G, such as higher speed and very low latency. The latter investment will be especially useful in the future, when 5G-connected customers will be the majority.