The Italian telecommunications market is undergoing a significant transformation following Vodafone Group’s €8 billion sale of its Italian operations to Swisscom. This deal merges Vodafone Italia with Fastweb, creating a more competitive entity poised to deliver innovative converged services, supported by annual synergies of €600 million and a focus on efficiency and scale.

Vodafone Group has completed the sale of its Italian operations to Swisscom for €8 billion in cash. This transaction values Vodafone Italy at a multiple of 7.6x adjusted EBITDAaL and approximately 26x OpFCF for FY24.

As part of the deal, Vodafone will continue to provide certain services to Vodafone Italy for up to five years. The proceeds will be used to reduce Vodafone Group’s net debt, with a target of returning up to €2.0 billion to shareholders after the completion of the current buyback program.

Swisscom CEO Christoph Aeschlimann said:

“The improved positioning in Italy will create long-term value for all stakeholders – thanks to growing cashflows and dividends in the future. At the same time, the focus on the Swiss market remains unchanged with continued high investments in innovation, top-quality service, and next-generation infrastructure.”

Swisscom said the sale was finalized on 31 December 2024, combining Fastweb and Vodafone Italia to create a stronger entity in the Italian telecommunications market. The new company, Fastweb + Vodafone, will focus on offering competitive converged services with a stronger scale and efficient cost structure. The new entity will unlock synergies of approximately €600 million annually.

The integration process has begun, and the company will be managed by a newly appointed Executive Committee, led by Walter Renna as CEO. The team includes several experienced leaders from Fastweb and Vodafone Italia.

The new Executive Committee consists of Walter Renna (CEO), Anita Carra (Chief Brand & B2C Marketing Officer), Fabrizio Casati (Chief Wholesale Officer), Silvia Cassano (Chief Human Resources Officer), Elenia Cerchi (Chief Regulatory & Antitrust Officer), Antonio Corda (Chief Legal, Compliance & Security Officer), Lisa Di Feliciantonio (Chief Communications & Sustainability Officer), Augusto Di Genova (Chief B2B Officer), Peter Grueter (Chief Financial Officer), Alessandro Magnino (Chief Strategy & Transformation Officer) and Federico Negri (Chief B2C Commercial Officer). The new Chief IT Officer as well as the new Chief Technology Officer will be announced shortly. In the interim, these roles will be assumed by John de Keijzer and Mark Düsener respectively.

Swisscom has adjusted its EBITDA guidance for 2024 to CHF 4.3-4.4 billion, reflecting integration costs and the exit from certain agreements. Despite this, Swisscom said its revenue, Capex, and dividend guidance remain unchanged.

Conclusion: A Strategic Shift with Far-Reaching Implications

The acquisition of Vodafone Italia by Swisscom signals a strategic realignment in the European telecommunications landscape, emphasizing the importance of consolidation to achieve competitiveness and innovation. This move could inspire similar consolidations in other markets as operators strive to balance scale with efficiency to address evolving consumer demands. For the Italian market, this newly formed entity may drive increased investment in next-generation technologies and push competitors to enhance their offerings, ultimately benefiting consumers and businesses alike. The ripple effects of this deal may also reshape partnerships, regulatory strategies, and investment trends across Europe, positioning Italy as a key battleground for telecom innovation.