ROME: Italy’s No.3 mobile phone operator Wind is open to making acquisitions to grow in the competitive Italian telecoms market and would be interested in BT’s Italian unit if it is put on the block, a top executive said.
Wind, owned by Egyptian tycoon Naguib Sawiris’ Weather Investments holding company, expects consolidation to get underway soon in the crowded and fiercely competitive Italian telecoms market, Director General Ossama Bessada told Reuters.
"A lot of the fixed-line players are having deep problems and consolidation is not far away," he said in an interview at the company’s Rome office. "The business will drive to consolidate because there are players who will drop out."
Asked if Wind would consider making an acquisition, Bessada said: "I think so, if the price is right. It has to make sense. But we want to grow, that’s certainly our message. It can be an acquisition or a merger. We’re open to it, it depends on the right opportunity at the right time."
Wind would be interested in BT Italia if it is interested in selling, Bessada said. BT Italia dismissed speculation earlier this year that its parent group is studying a sale of the unit.
Italian broadband operator Fastweb in the past has also said it would look at BT Italia if it is put up for sale.
Sawiris, who also owns Orascom Telecom, last year was quoted as saying Wind was ready to evaluate a merger with Hutchinson Whampoa’s 3 Italia telecoms unit.
Wind has not evaluated 3 Italia further after understanding that the company was not up for sale, and synergies for such a deal have also gone down in the meantime, Bessada said.
Improving image
Wind, which ranks behind Telecom Italia and Vodafone in the Italian mobile market and is No.2 in the Italian fixed-line business, has been investing in improving its network coverage and is also focusing more on high value customers, Bessada said.
"Five years ago we had a bad network, we have to admit. Now we have a network that is on par or in some areas even better than others," said Bessada. "We still suffer from perceptual issues because people are used to thinking that ‘Wind doesn’t work well’ while it is now one of the best. But I think that word of mouth and image is working well for us."
Despite a weak Italian economy, consumer spending — which drives 85 percent of Wind’s revenues — on telecoms has held up, Bessada said. But telecom spending by businesses has worsened this year and is unlikely to stabilize until next year, he said.
"Consumer spending seems fine — not very good, but so far we don’t see it deteriorating. Consumer spending is a bit resilient," he said. "We believe they (business segment) are more affected by the recession and slowdown … Many companies are cutting down their expenditures, trying to save, so new projects, heavy infrastructure are delayed. That’s a problem."
This year, Wind expects to report revenue growth of 3 to 5 percent, with earnings before interest, taxes, depreciation and amortization of between €2.05 billion to €2.1 billion and capital spending about €900 million, he said. It expects mobile revenues to grow about 3 percent.
Separately, Bessada said a project by three Italian telecoms operators including Wind to roll out a new, €2.5-billion fiber-optic network could go ahead even without the involvement of No.1 Italian telecoms operator Telecom Italia.
Telecom Italia has welcomed the initiative, but rejected the idea of a network run by multiple players.
"It’s more efficient and it’s more useful for everybody if Telecom Italia is involved but we can’t force Telecom Italia to join," Bessada said. "There are clear prerequisites, but if the government and competent bodies provide those prerequisites then certainly this project is feasible without Telecom Italia."
