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Is Italy’s plan to create a national broadband network in ruins?

News

A government intervention in the long-running saga reportedly could prevent a single broadband infrastructure.

Reuters reports that the plan to create a single unified fixed broadband access network in Italy by merging the assets of Telecom Italia and state-backed wholesaler Open Fiber appears to be doomed.

There have been many twists and turns in this epic, but a government intervention looks set to block the plan. The government is now led by Mario Draghi and looks set to abandon the plan proposed by its predecessor.

Further, the recovery plan that Italy submitted to the European Commission refers to broadband networks, not a network.

TIM is to file a complaint with market watchdog Consob, adding that interpretations in the press were “entirely inappropriate and unsubstantiated”. Its share fell 9% when the story broke.

In a clarification statement, operator said that the link between Italy’s recovery plan and possible aggregations between companies operating in the broadband network industry “is not understood”.

The Italian government declined to comment.

Previously…

Under the previous government’s plan, TIM could initially own more than 50% of the new single network, depending on the value of its assets contributed, and in return it would make access available to all market players on an equal footing.

Under that plan, the new entity, called AccessCo, could be eligible for billions of euros from the EU Recovery Fund money to upgrade the country’s network.

The decision about the network strategy would lie with the state lender Cassa Depositi e Prestiti (CDP). It is TIM’s second largest shareholder and was set to take control of Open Fiber later this year.

TIM has consistntly refused to countenance any deal that would result in it owning less than 50% of any combined entity with Open Fiber.

Consortium option?

Sources have told Reuters the government was looking at alternatives to speed up the broadband rollout, including a less ambitious plan to merge Open Fiber with FiberCop.

FibreCop is a vehicle controlled by TIM that runs the group’s infrastructure between street cabinets and premises.

Italy’s ruling parties are also discussing a plan to pull together all the country’s telecom operators in a consortium to speed up the rollout of ultra-fast infrastructure nationwide, a document seen by Reuters showed.

In the meantime, TIM has committed to closing the digital divide in Italy this year – a big challenge given how far down the league European league table Italy is for fibre penetration  – and has announced two 100% connected regions (Apulia and Friuli Venezia Giulia) this year.