Huawei signs $1.3 billion 4G deal with Wind Italy

Telecom Lead Europe: Despite economic challenges in Italy, Wind is set to invest $1.3 billion in a 4G / LTE network that will be deployed by Huawei.

The new 4G / LTE network will enable Wind to increase competition with rivals Telecom Italia, which is planning a merger with Hutchison Whampoa, and Vodafone Plc.

Wind’s challenges in Italy

Italy’s GDP is expected to contract by 1.1 percent in 2013 against degrowth of 2.1 percent in 2012.

Italy recorded unemployment rate at 11.1 percent as of October 2012 and the rate is expected to increase to 11.8 percent in 2013. Household consumption index is expected to contract in line with the overall macro economic trend.

Wind CEO Maximo Ibarra’s telecom strategies

Wind CEO Maximo Ibarra said the new considerable investment in the fourth generation mobile broadband network follows last year’s purchase of the LTE spectrum.

Huawei is already a supplier of the three other Italian mobile phone companies and has won 4G contracts with EE in Britain and Vodafone in Germany.

In a January 2013 report, Wind said it continues to outperform its competitors and strengthen its position in the Italian market (mobile revenue share up from 19.9 percent as at the end of 2011 to 20.5 percent as the end of Q3 2012).

Wind’s Capex has been consistently above EUR 1.1 billion in the last 4 years.

Wind follows aggressive site sharing program with other mobile operators for new infrastructure deployed, including for LTE, in order to reduce Opex and Capex.

Number of sites shared increased by 44 percent in 2012 from 1.5K to 2.1K.

The mobile operator is also undertaking free of charge modernization of 2G and 3G network equipment future proof for LTE extension, while it reduced of power expenditure through implementation of energy saving solutions.

It is in the process of Improving coverage and quality of the HSPA+ network, deploying 42Mbps in 7 largest cities.

Wind, which is owned by VimpelCom, is the third-largest mobile telecoms operator in Italy, in January said it will leverage on bundle offer concept, including SMS, to protect from OTT’s cannibalization.

Meanwhile, Telecom Italia has asked Chairman Franco Bernabe and four board members to assess proposals for a merger with Hutchison Whampoa’s local mobile phone unit 3 Italia.

Bernabe is under pressure to find a strategic solution that improves returns at his debt-laden group, now struggling against falling margins in crisis-hit Italy.

Arvind Krishna
[email protected]