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European Commission approves breakup of Blu mobile operation

The European Commission has agreed to the breakup of Blu, Italy's fourth mobile telephone operator, and the sale of its parts to other operators in the sector.

No suitable purchaser could be found to buy Blu in one piece. Blu's "serious financial difficulties" also influenced the decision.

The sale of Blu as a whole was a condition imposed by the commission last September when Italian conglomerate Pirelli and Blu parent, Edizione, applied for European Commission approval of their joint acquisition of Telecom Italia.

At the time the commission insisted that Blu remained a viable competitor to the new Italian telecommunication giant. With not even one potential buyer, the commission is now more concerned about the disappearance of Blu altogether than about its breakup among other mobile operators.

"To avert the anticompetitive effects that liquidation of Blu would have created, the commission granted the request by Edizione that it allow the separate sale of Blu's assets to the other mobile operators," the commission said.

Edizione proposed transferring Blu's sites and employees to each of the operators in the sector, including to Hutchison's H3G. The Blu brand name and two million- strong customer base will go to Wind, and the whole of its share capital to Telecom Italia Mobile.

The commission stipulated that the Italian national regulatory authorities should allocate Blu's frequencies to the existing GSM (Global System for Mobile Communications) mobile telephone operators on a fair basis.

Last week, the Italian minister for communications, Maurizio Gasparri, formally backed Edizione's proposed breakup of Blu.

The remaining Italian mobile phone operators undertook to use any of Blu's frequencies assigned to them exclusively for the GSM mobile telephone service.
 

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