October 18, 2016 / 4:55 PM / a year ago

Cellnex courting Iliad as new customer in Italy

MILAN, Oct 18 (Reuters) - Spanish telecoms masts group Cellnex has approached Iliad about renting out infrastructure to the French company when it becomes the fourth mobile network operator in Italy, Cellnex Chief Executive Tobias Martinez said on Tuesday.

Earlier this year Iliad agreed to set up as an operator in Italy to provide the new competition wanted by the European Commission in order to approve the merger of local rivals CK Hutchison Holdings’s 3 Italia and Vimpelcom’s Wind Telecomunicazione, creating new opportunities for companies like Cellnex and its Italian competitor INWIT.

“We’ve introduced ourselves ... a new player means new demand in terms of infrastructure so for us Italy right now is very attractive,” Martinez told Reuters on the sidelines of an event.

He added, however, that it was still early days as he did not expect Iliad to start commercial operations in Italy before late 2017.

The French operator also needs to decide whether to run its own basic infrastructure, which can be costly, or outsource it to providers like Cellnex, which already operates nearly 8,000 masts in Italy.

The executive added Cellnex would also look at any more masts that might come onto the market as a result of the Wind-3 Italia merger, but added that the process would take time.

Cellnex’s average tenancy ratio - the number of operators using a single mast - stands at 1.3 in Italy, and Martinez said there was scope for raising that closer to 2 over the coming years by attracting new customers, dismantling duplicated infrastructure and making the operations more efficient.

The group recently bought portfolios in the Netherlands, France and the United Kingdom and is now focusing on consolidating the operations, but M&A is not off the table.

“We are a very agile company, when we see a good opportunity we go after it,” he said.

Cellnex had been vying for a stake in INWIT until owner Telecom Italia scrapped the sale earlier this year.

Martinez said Cellnex was no longer in talks for INWIT and was not looking at Telxius, the telecom masts business whose IPO parent Telefonica abandoned last month due to weak investor demand.

“We don’t know what Telefonica will decide on Telxius so we cannot analyse its attractiveness. There is no case right now, it’s wait and see,” he said, adding the same applied to INWIT.

“If it comes, then we will look at the parameters.” (Reporting by Agnieszka Flak and Stefano Rebaudo; Editing by Greg Mahlich)

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