Hutchison wants its 3 Italia unit to control any enlarged entity, said the people, who asked not to be identified because the discussions are private. VimpelCom prefers a 50-50 partnership with its Wind Telecomunicazioni SpA unit, and the two sides aren’t close to an agreement, the people said. La Repubblica newspaper reported yesterday that Wind and 3 Italia are in advanced talks to merge.
Combined, the companies could create the biggest Italian mobile carrier with 35 percent of the country’s customers, excluding resellers, according to Wind’s market-share estimates at the end of March. They account for more than 6 billion euros ($8 billion) in annual revenue together.
Representatives for 3 Italia and VimpelCom, which is controlled by Russian billionaire Mikhail Fridman, declined to comment on the talks.
The merger discussions are intensifying as carriers across Europe struggle to maintain prices for their services amid stiff competition. The European Union’s approval this month of a merger of two national wireless carriers in Germany gave the struggling $230 billion industry a reprieve while clearing the way for a new round of mergers and acquisitions.
Telecom Italia shares declined 4.1 percent to close at 87.2 euro cents in Milan. Hutchison declined 0.2 percent to HK$104.50 in Hong Kong. VimpelCom slid 3.7 percent to $8.65 at 12:39 p.m. in New York.
The carriers have held merger discussions in the last 12 months after 3 Italia and Telecom Italia SpA (TIT) -- the country’s biggest phone company -- broke off negotiations for a combination.
“In Italy, Hutchison Whampoa will be a buyer not a seller,” Vincenzo Novari, chief executive officer of 3 Italia, said in an interview a year ago. “Discussions with Telecom Italia have now stopped, but who knows what happens in the fall?”
The combined businesses would have about 30 million mobile customers, in line with current leader Telecom Italia’s subscriber numbers.
Three and Wind’s combined revenue would still be below the 16.2 billion euros that Telecom Italia’s local operations won last year. Vodafone Group PLc’s (VOD) Italian business said it had 3.86 million pounds ($6.62 million) in sales in the 12 months ending in March. 3 Italia is the smallest of Italy’s four wireless carriers, trailing Telecom Italia, Vodafone and Wind.
To contact the editors responsible for this story: Kenneth Wong at email@example.com Mark Beech, Dan Liefgreen