One year after announcing plans to combine their respective Italian wireless subsidiaries, Hutchison of Hong Kong and Dutch carrier VimpelCom received European Commission (EC) clearance yesterday to proceed with the €20 billion (US$22.3 billion) transaction, which would create the largest mobile phone carrier in Italy.

Described by VimpelCom CEO Jean-Yves Charlier as “a transformational merger,” the proposed 50-50 joint venture would combine the assets of Hutchison unit 3 Italia and VimpelCom’s Wind Telecomunicazioni, which rank respectively as the fourth- and third-largest mobile network operators in Italy. Commanding more than 31 million customers representing a one-third share of the Italian wireless market, the post-merger entity is expected to emerge as a potent rival against Telecom Italia and Vodafone Italy. While the transaction, as originally proposed, would have reduced the number of Italian national wireless carriers from four to three, 3 Italia and Wind agreed in July to sell a portion of their third- and fourth-generation wireless assets to upstart French wireless carrier Iliad, which has plans to enter the Italian market as a new national carrier. Acknowledging that the Iliad deal had sufficiently allayed competitive concerns, EC Competition Commissioner Margrethe Vestager—marking the EC’s first approval of a major telecommunications merger in two years— proclaimed that the case at hand “shows that telecom companies in Europe can grow by consolidation within the same country, provided effective competition is preserved.”

Canning Fok, the co-managing director of Hutchison, lauded the EC’s decision as “a good day for businesses and consumers across Italy” and predicted that the joint venture will create “a . . . company with the scale and strength to offer world-leading telecom services.” Affirming the merger partners’ plan to invest US$7.8 billion in their combined network over the next five years, Charlier declared: “we’re bullish about the future of Italy.”