(Bloomberg) -- KKR & Co. has won early European Union approval for its €22 billion ($23.8 billion) bid for Telecom Italia SpA’s land-line network, paving the way for a deal that sees the ex-phone monopolist cede control of its most valuable asset.

The European Commission said on Thursday that the deal was cleared without conditions or the need for an in-depth probe after its initial review revealed no competition concerns.

The EU’s merger watchdog said it “investigated the impact of the transaction on the market for wholesale broadband access services in Italy and concluded that it would not significantly reduce the level of competition.”

Telecom Italia agreed last year to sell its landline network to KKR and the transaction was originally expected to be completed by the end of this summer. The deal was aimed at slashing the phone carrier’s multibillion-euro debt pile. Italy will retain a minority stake in the network business due to its status as a strategic asset. State lender Cassa Depositi e Prestiti SpA already owns almost 10% of Telecom Italia.

As a former monopoly operator, Telecom Italia has always been hamstrung by a complex mix of high labor costs and ever-higher investments to keep its network infrastructure up to date. Still, the real roots of the company’s troubles lie with Italy’s domestic telecommunications environment.

The country has one of the world’s most competitive telecoms markets. Monthly subscriptions for full fiber landline services, which usually include unlimited internet, can cost as little as €20 to €25, about a quarter of what most US consumers pay.

The commission said that KKR and Telecom Italia also agreed on a master services agreement, or MSA, that will govern the relationship between the target and Telecom Italia post-transaction. 

“Although the MSA does not fall under the scope” of the EU’s merger regulation “it remains however reviewable under EU or Italian antitrust rules as well as subject to regulatory oversight,” it added.

Italy’s Finance Minister Giancarlo Giorgetti said the government welcomed with “great satisfaction” the EU decision. KKR declined to comment.

Telecom Italia shares rose 1.6% in Milan trading, reversing earlier declines when the telecom operator reported results that showed challenging trends in Italy as the pace of its mobile and broadband subscriber loss quickened.

According to people familiar with the matter, KKR made an informal offer to maintain about 15 wholesale dark fiber existing contracts with Telecom Italia’s rivals at current prices, in order to assuage earlier EU concerns about the deal. Those concessions are, however, not legally binding. 

The commission had earlier been quizzing rivals and customers in the Italian telecoms market about potential distortions to competition resulting from the transaction.

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The watchdog had also privately warned US private equity giant KKR and Telecom Italia that a key condition for rubber stamping the acquisition is that wholesale prices for the Italian phone carrier’s rivals are kept down.

--With assistance from Jillian Deutsch.

(Updates with responses starting in ninth paragraph)

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