Inwit still in the eye of the storm over clash with tlc groups

(Il Sole 24 Ore Radiocor) - There is no stopping the selling on Inwit, which has been in the storm for days now over the contracts with tlc companies. After Fastweb, also Tim questioned the said Master Service Agreement (Msa) signed with the tower group, whose shares, therefore, also dropped three points. Over the past month they have lost about 25% of their value.

Last Friday, the company held a conference call in which it reconstructed the situation of the Msa contract with Fastweb and reiterated the uniqueness of the network. The contract, according to Inwit, remains valid until 2038, contrary to Fastweb's position, which indicates the expiry of the contract ten years earlier. Inwit also pointed out that its network appears difficult to replicate, considering that around 35% of the sites are in unique locations with no alternative towers, while for a further 40% there would be no viable options due to a lack of technical space. It emerges that although the parties will have at least three years to migrate to an alternative network, they will have to contend with a disruption of their services, as the timeline, for Inwit, is insufficient to build a fully replacement network.

The top management of the tower group also emphasised that the price envisaged by Msa is substantially in line with European benchmarks. In any case, the company has reiterated that it remains open to negotiating tables in order to find a win-win solution, which could include greater flexibility in the use of the towers, also through the possible involvement of third-party operators and further network efficiencies. Meanwhile, on the legal front, Fastweb has initiated proceedings to have its interpretation on the MSA deadline recognised, while Inwit has requested an accelerated proceeding with a precautionary measure to suspend the effects of the deadline. Equita analysts explain that 'the first key step is expected by June, when the Court of Milan is expected to rule on the precautionary measure. Subsequently, the losing party may appeal, with a decision expected by the end of November'. The experts also made it clear that if the appeal confirms the precautionary decision, the dispute will be closed; if not, the timeframe will lengthen, with the ordinary proceedings that could be closed as late as 2029.

As for Tim's move to terminate the Msa contract with Inwit at 2030 or even 2028 (should the dispute between Inwit and Fastweb establish an expiry date for the Msa in that year), for Equita it is part of a strategy aimed at obtaining more favourable economic conditions on the Msa. In fact, the company has said it is open to a negotiating dialogue. For now, however, Inwit has returned Tim's cancellation to sender, calling it 'without legal basis' and reiterating that the contract will expire in 2038. Equita, meanwhile, reiterated a 'Hold' on Inwit, with a price target of EUR 7, and a 'Buy' on Tim, with a price target of EUR 0.7.