Fastweb terminates INWIT deal, igniting telecoms tower feud in Italy

* Contract ended over INWIT's high tower costs

* INWIT ​plans ⁠legal action against termination

* Telecom Italia ​expected to follow Fastweb's move (Recasts with details from Inwit statement, adds background)

MILAN, March 25 (Reuters) - Swisscom's Italian arm Fastweb on Wednesday terminated its long-term contract ⁠with INWIT, escalating a spat with the country's top telecom ⁠towers company.

Fastweb, which inherited ​the contract with INWIT through its acquisition of Vodafone Italy last year, had been pushing to renegotiate the agreement, a move that the tower company had resisted.

As ​part ‌of efforts to lower its lease costs, Fastweb last week announced a joint venture with Telecom Italia (TIM) - INWIT's other main customer - to build up to 6,000 telecoms towers in Italy.

TIM, which was also seeking to renegotiate ​with INWIT, will likely mirror Fastweb's decision to end its deal with ‌the tower operator, with a move expected at a board meeting over the weekend, sources told Reuters.

"The decision to ‌terminate the master service agreement stems from INWIT's tower costs being above market level and its refusal to engage in formal negotiations to align with ​standard market conditions," Fastweb said.

INWIT, whose shares fell as much as 10% on Wednesday and were ‌down 5.7% as of 1245 GMT, said Fastweb's move had no legal basis and said it would file an urgent request to a Milan court to ⁠block it.

The ⁠long-term contracts under which INWIT's 25,000 masts across ‌Italy hosts the antennas of the two telecoms operators make up the bulk of the tower ​company's 1-billion-euro ($1.16 billion) ​revenue.

Born as a spin-off of TIM's mobile tower ‌assets, INWIT merged with Vodafone's Italian mast business in 2020. Its leading investors are infrastructure fund Ardian and Vantage Towers.

INWIT

Telecom Italia

Vodafone