Inwit loses the first round in court against Tim

The first round goes to Tim. The Court of Milan has rejected Inwit’s application seeking to halt the former monopolist’s withdrawal from the Master Service Agreement, the contract governing the use of the masts. It is not yet a victory on the merits, but it is a development that shifts the balance of the case: the judge did not find any risk of imminent and irreparable harm, a necessary requirement to halt TIM’s withdrawal as a precautionary measure – a process that will, in any case, take years. The company led by Pietro Labriola has accepted the outcome and emphasised, in a statement, that the Court ruled out both the grounds for urgency and the conditions for claiming an abuse of economic dependence against Inwit. The company expresses its ‘satisfaction’ and is confident that the matter will be resolved swiftly, asserting that it has acted ‘fairly and in full compliance with the contractual agreements’.

For its part, Inwit is not backing down. The company – 32 per cent of which is owned by an Ardian fund vehicle and 39 per cent by a vehicle controlled by Vodafone and the Oak consortium (along with Gip and KKR)—first of all issues a second press release refuting the claim, contained in TIM’s statement, that the Court has ‘confirmed the legitimacy of the Group’s withdrawal from the Master Service Agreement (MSA)’. The towerco counters that this statement is “incorrect”, pointing out that the matter “remains unresolved and has been referred to a full trial”. However, this has led to the announcement of a request for a trial on the merits ‘without delay’, whilst also considering an appeal against the order. Above all, Inwit reiterates its position: the option exercised in 2022 would have extended the contract until 2038, with no possibility of early termination. The Court, the group points out, “has not ruled on the correct interpretation of the disputed contractual clauses nor on the duration of the MSA”.

This is precisely where the dispute centres. Tim maintains that the contract expires in 2030 and has given notice of termination within the prescribed timeframe. However, the expiry date could be brought forward to 2028 should the courts accept the interpretation put forward by Fastweb, which is also involved in a dispute with Inwit. According to the towerco, however, the 2022 shareholding restructuring would have triggered a renewal until 2038. These are two incompatible interpretations, behind which lies a much broader dispute: the telecoms’ attempt to ease the terms of contracts signed in a different era and now deemed unsustainable by the companies. The stakes are high. TIM and Fastweb are Inwit’s two main clients and together account for almost 85 per cent of its revenue, which stands at around one billion. The contract with TIM alone accounts for approximately 40 per cent. A decision on the application for interim relief against Fastweb is still pending. Meanwhile, however, the Court has denied Inwit the urgent injunction that would have suspended the termination. In any case, the share price of the tower operator led by Diego Galli did not suffer on the stock market, rebounding after an initial sharp dip and closing up 2.56 per cent. The market appears to have already priced in the scenario that took shape yesterday. And the share price, according to the view of various analysts, remains undervalued at 6.6 euros.