Eolo hints at expanding wholesale fixed wireless after €900m

Eolo hints at expanding wholesale fixed wireless after €900m takeover

21 July 2021 | Alan Burkitt-Gray

Cover

A Swiss private equity investor is to acquire a 75% stake in Eolo, the Italian fixed wireless company that last week agreed a wholesale deal with TIM.

Partners Group, based in the Swiss city of Zug, said the deal values the company at €1.2 billion – implying it is spending €900 million on taking over the business from existing owner, Searchlight Capital Partners.

Founder and CEO Luca Spada (pictured), who controls Searchlight, will personally hold on to the other 25%, valued at €300 million after today’s deal.

Partners Group, which has invested US$2.4 billion in digital infrastructure assets on behalf of its clients, hinted that with its backing Eolo might expand its fixed wireless access (FWA) operations beyond Italy.

Spada said: “Fixed wireless access is a leading broadband technology that can deliver better connectivity whilst co-existing with other telecoms infrastructure access types, such as fibre and 5G mobile. Eolo is a pioneer in deploying this increasingly popular technology, especially in Italy, which still lags other countries in terms of broadband adoption, highlighting the demand for Eolo’s services.”

Last week TIM, the former Telecom Italia, announced it had signed a memorandum of understanding for Eolo to provide wholesale FWA in Italy’s so-called white – that is, unserved – areas. No value was placed on that deal.

Eolo provides its FWA service via more than 3,400 base stations, connected with 13,000km of fibre. It can potentially reach more than 80% of Italian households, said Partners Group.

“Currently, the company connects over 600,000 households and businesses to the internet, the majority of which are based in less densely populated areas. Eolo’s FWA technology delivers speeds and quality comparable or superior to other broadband offerings available in its target areas, but with technical solutions that can overcome the connectivity challenges in rural areas, thus playing a critical role in addressing the digital divide in Italy.”

Partners Group said it will work with Spada and the rest of Eolo’s management team “on a transformational value creation plan that will include densification of the company’s unique FWA network, which uses millimetre wavebands”.

It said that, as well as expanding its retail base following the acquisition, it will develop the wholesale customer base, “starting with the recently signed partnership agreement with Wind Tre and memorandum of understanding with TIM”.

Partners Group’s Livio Fenati, who is co-head of its private infrastructure operations in Europe, said: “Eolo benefits from transformative trends driving increased digitisation, ubiquitous connectivity and network densification, which are the themes that guide our investment approach to digital infrastructure.”

He added: “Our vision is to build on Eolo’s domestic leadership position and transform the company into a leading European fixed wireless access broadband platform.”

Spada said: “Partners Group is a leader in investing and transforming digital infrastructure assets globally, and its operational expertise and partnership approach makes it the right partner for us as we embark on this next phase of growth.”

Partners Group’s Doris Schürch, a member of the private infrastructure management team, gave further hints of expansion beyond Italy. “Our thematic research shows Eolo is ideally positioned to capitalise on growing demand for high-speed broadband both in Italy and across Europe,” she said. “The company’s management team, led by Luca, has cultivated a great entrepreneurial culture and we are looking forward to working with them.”

Partners Group has invested USD 2.4 billion in digital infrastructure assets on behalf of its clients since inception.