New company to create Italian network

15 December 2010 |


Seven Italian telecoms operators have agreed to the creation of a new company to build a long-awaited nationwide broadband network, ending years of disagreement about how best to rectify the country’s poor track record of broadband deployment.

Italy’s Industry Minister Paolo Romani said the memorandum of understanding (MOU) between the companies would lead to a jointly funded entity, backed also by public funding, responsible for building basic fibre-optic infrastructure in populous as well as rural regions. The agreement is a triumph for Italy’s telecoms regulator AGCOM, which for years has been urging operators to take a concerted approach to broadband development.

The participating companies – Telecom Italia, Fastweb, Wind, Vodafone Italia, Tiscali, BT’s Italian unit and 3 Italia – have long been debating the best way to expand access to high-speed broadband. Agreement has to be reached on a number of details, such as how the network will be managed, and how funding will be split.

The MOU represents a notable change of heart by Telecom Italia. CEO Franco Bernabe had previously distanced the the telco from participation in shared network proposals, saying any attempt to coerce the company would contravene Italian laws guaranteeing companies freedom in their pursuit of profitability. Telecom Italia is now likely to abandon plans to reach 50% of the Italian population by 2018 with its own 100Mbps broadband network.

Competitive players Fastweb, Vodafone and Wind had also previously published their own plans for a joint €2.5 billion fibre build.

Tig Harvey, research director with Telegeography, said the long running Italian saga mirrors troubled national broadband plans in other countries: “Something similar is going on in Australia, and also Singapore,” said Harvey. “It’s still a bit early to tell how the Italian situation is going to completely pan out. Given the red tape in Italy, I don’t think anyone could definitely say that this plan will go ahead. However, with government backing and all of the big operators now on board, it looks like a good proposition.”

In a separate move, the European Commission has asked AGCOM to re-examine a proposal that would lead to an increase in Telecom Italia’s wholesale local loop pricing. The incumbent’s rivals are now likely to pay a lower than planned tariff for accessing its fixed-line infrastructure.