By Foo Yun Chee and Elvira Pollina
BRUSSELS/MILAN (Reuters) - Vodafone (L:VOD) and Telecom Italia (MI:TLIT) will have to offer concessions if they want to win European Union antitrust approval for their plan to merge their mobile tower infrastructure, people familiar with the matter said on Thursday.
The telecoms operators announced the deal in July last year under which Vodafone will transfer its Italian mobile masts to INWIT (MI:INWT), which is 60 percent owned by TIM.
Telecoms companies are looking to such tie-ups to cut debt and share heavy investments. They hope that EU antitrust regulators will soften their stance against four-to-three mergers given the European Commission's new focus on boosting Europe's digital market.
Vodafone and TIM, Italy's biggest phone group, have until Friday to propose remedies. Alongside the towers deal, they are also teaming up to roll out 5G technology in Italy.
The companies are looking at making concessions, a person familiar with the matter said, declining to provide details.
Mobile virtual network operators in Italy have asked the Commission to demand that the companies provide access to their network once the deal is completed, especially as they roll out 5G infrastructure, seen as the next big revenue source, sources told Reuters.
Vodafone said: "We continue to have constructive discussions with the Commission."
TIM had no immediate comment while the Commission, which has a Feb. 21 deadline for its preliminary review of the deal, declined to comment.
Earlier this month, EU regulators sought feedback from rivals and customers on whether INWIT will offer better services with lower prices or lower quality services and higher prices following the deal, according to an EU document seen by Reuters.
Regulators also wanted to know if INWIT would have the ability to shut out rival mobile network operators in Italy's retail mobile telecoms services and in the wholesale access market and call origination on mobile networks.
The EU asked what the impact of the deal would be on competitors, and also if Vodafone and TIM would coordinate in retail mobile telecommunication services and in wholesale access and call origination on mobile networks.
French telecoms rival Iliad (PA:ILD) has already made its concerns known to the Commission.