Italian mobile operator Blu’s shareholders all want to sell out.
The shareholders of Italian mobile operator Blu have decided to put it up for sale. Gilberto Bennetton, CEO of Edizione Holding, which owns a large stake in Blu through motorway operator Autostrade, says, all Blu shareholders, I mean all, have decided to sell. Blu is Italy’s smallest mobile operator, and failed to win a license in Italy’s 3G spectrum auctions because the consortium partners weren’t prepared to pay. Its other shareholders are BT and various local utilities.
Many in the industry are starting to think Blu might be better off without a 3G license. With a relatively small existing subscriber base, it does not have the capacity problems of its rivals and so is better placed to implement 2.5G solutions such as GPRS and EDGE. And it has avoided paying a lot of money for little short-term gain. Datamonitor estimates that it will take an average 3G operator seven years to earn back the cost of its license.
So while it’s understandable that BT wants to lose its minority investment in a non-core market and that the utilities want to leave mobile, Blu could be a good investment for another player. Greenfield operators, Andala (majority-owned by Hutchison) and Ipse (whose biggest shareholders are Telefonica and Sonera), could benefit, acquiring a customer base, a network, sales sites and a 2G network to cover gaps in their 3G coverage. However, all their major investors have spent heavily on 3G expansion already. They may not be willing to shell out scarce cash for Blu – and Blu shareholders may well be reluctant to accept shares.
Perhaps Blu will instead find a buyer who will keep it as an independent operator. If so, there is clearly a niche in Europe for low-priced consumer-focused mobile operators. So far, such firms have only been run as mobile virtual network operators, but there’s no reason why Blu shouldn’t use its own network to offer similar services – either under its own brand or by renting capacity to MVNOs. Such an operation would be nicely differentiated from the high-cost, high-fee 3G services the other operators in Italy are planning.
