"The dance of the networks. What the telecoms game tells us about Europe"

It is called consolidation, but what is happening in the European telecoms sector – starting with Italy, France and the UK – is something more than that. Of course, ultimately a fragmented market such as that of the Old Continent will see a reduction in the number of operators: today there are as many as 45 major players; tomorrow there will be fewer, but larger ones. In the United States there are three truly national operators; in China, the same number. At the same time, however, the new telcos will become increasingly ‘techcos’, as the jargon goes – that is, technology platforms centred on the cloud, artificial intelligence and digital services. Have we started at the end? Perhaps, but this is the common thread linking the news of recent days in a sector that is mature if judged through the lens of the past – even the recent past – but one undergoing a disruptive transformation. For this to happen, more capital, financial clout and entrepreneurial drive are needed. It is a process that involves both the public sector – as in Italy with Poste-Tim – and the private sector – as in the United Kingdom with Iliad-Vodafone – as well as a combination of both in France with SFR, acquired by Iliad alongside Bouygues and Orange (a company in which the government is the main shareholder, albeit with a stake of only 13 per cent).

Poste Italiane kicked things off last year by acquiring a 20 per cent stake in TIM with the aim of gaining full control. On Saturday, the telecoms company’s board of directors gave the go-ahead, and yesterday the public takeover and exchange offer was launched; there will be time until September to reach 100 per cent, but the outcome seems a foregone conclusion. For each TIM share tendered, Poste Italiane will pay €1.67 in cash and issue 0.218 new Poste Italiane shares. For example: for 500 TIM shares, 109 Poste Italiane shares and €835 in cash will be allocated, with payment due on 18 September 2026. Should the offer period be reopened from 21 to 25 September, payment for any additional acceptances would take place on 2 October. At that point, TIM could be delisted from the stock exchange. From one state-owned entity to another after three turbulent decades in which private shareholders have not exactly set the world alight? It is possible, given that 65 per cent of Poste Italiane’s share capital is held by CDP and the Treasury. But that is not all. The plan aims to build what it describes as “Italy’s largest connected infrastructure platform”, with 150,000 employees, 13,000 post offices and around 4,000 TIM shops. The integration between TIM and PosteMobile is also being extended to fixed-line telephony, plus the sale of insurance, financial and energy products through their respective channels, as well as business services combining connectivity, welfare, payments and logistics. A platform based on combining Poste’s transaction data with TIM’s data on browsing, geolocation and service usage. In short, from telco to techco.

France also took action in May. Altice (a Franco-Dutch company founded by Patrick Drahi), which is in financial crisis, has decided to sell SFR for just over 20 billion euros to Bouygues, which will hold a 42 per cent stake, Iliad with 31 per cent and Orange (the remaining 27 per cent). The spectrum will be divided into three parts; the rest will be allocated according to the prevailing interests of the new shareholders. Bouygues Telecom will acquire the largest share: SFR Business, part of the consumer business, Prixtel, mobile infrastructure in less densely populated areas, and fixed assets dedicated to B2B. Iliad will take on all Red by SFR customers, part of the consumer portfolio and a share of small business customers. Orange will acquire other consumer customers and the MVNOs Réglo, Syma and Coriolis. Essentially, this is more of a carve-up than an integration, and the flaw on paper is excessive industrial complexity, even if, for the moment, all the key players have raised a toast. Champagne, ça va sans dire. In London, it was mostly beer – traditional ale – that was flowing. But the key figure there is Xavier Niel, the founder of Iliad, who is shelling out £4.4 billion for a 16 per cent stake in Vodafone – a significant step in an expansion that makes the French tycoon the sector’s most dynamic entrepreneur in Europe, thanks to his presence in Italy, Poland, Ireland and Sweden, with a foothold in Latin America too. Niel was also interested in Vodafone Italia, but was pipped to the post by Fastweb, a subsidiary of Swiss Telecom (so that acquisition, too, can be seen as part of the same process of European consolidation). “Vodafone had become too bloated, too slow and too complex,” Niel told the Sunday Times, making no secret of the fact that he will have to “sell off infrastructure and non-strategic assets”. Here too, the game will be decided by change and technological innovation, and all analysts emphasise that this is not the end; on the contrary, a train has set off and we do not know where it will end up.