The European Commission gave the go-ahead Thursday to a merger between two of Italy's four mobile phone operators - Wind and 3 Italia - on the condition that they make space for France's Iliad to enter the market as a new competitor.
"The Italian consumers will benefit because the market will continue to be competitive and therefore they can hopefully enjoy affordable prices, innovation and high quality of their networks," EU Competition Commissioner Margrethe Vestager said in Brussels.
Wind, a subsidiary of Russian-Norwegian-owned telecoms group VimpelCom, and 3 Italia, owned by Hong Kong-based conglomerate Hutchison Holdings, announced plans to merge their activities in August 2015.
The commission, the European Union's competition watchdog, initially raised concerns that the move would hamper competition in the Italian mobile phone market, reducing choice and quality of service while driving up costs for customers.
To address these issues, Hutchison and VimpelCom agreed to sell assets to the French telecoms operator Iliad, which is not yet present in Italy.
Vestager said this "strong remedy" would "fully address" the commission's concerns.
Specifically, the companies must divest a share of their mobile radio spectrum and transfer several thousand mobile base stations to Iliad, as well as allowing the new operator to use their nationwide network until it has built its own.
Wind and 3 Italia are currently the third- and fourth-largest mobile phone operators in Italy, alongside TIM and Vodafone.
The commission can block mergers and takeovers or order substantial changes in their terms if it deems that they unduly limit market competition.
The EU's executive has long worried about a decline in the number of mobile phone providers offering services in Europe, fearing that prices will be driven up and innovation stifled.
"We very often hear that telecom consolidation within member states is necessary to ensure network operators are profitable enough to allow them to invest in networks," Vestager said.
"You do not repair the market by reducing competition. You repair the market by ensuring that companies have the incentive to try to be better than their competitors in terms of quality, in terms of price, in terms of choice," she added. "Today's decision ensures that for the Italian market."