Italian telecommunication investment company, CDP (Cassa Depositi e Prestiti) supports the idea of creating a single fiber optic network to deliver broadband services. The CEO of CDP, Fabrizio Palermo shared his organization’s thinking during a conference in Rome.
Significance of CDP’s Thoughts
Two active players in Italian High-speed Broadband are Open Fiber and TIM (Telecom Italia) are controlled by the CDP. TIM has been progressing with its traditional speed of deploying broadband services through fiber to the cabinet architecture in Italy. The Italian Government fed up with the slow moving broadband growth in the country instructed the state electricity company to form a separate organization to speed up the activities.
Open Fiber decides to construct its own fiber optic backbone and access network. Why? Open Fiber can lease the fibers to multiple service providers and make money. TIM is building its own network. Thus, there and multiple installations going on which will lead to unnecessary investment in infrastructure that has enough potential to serve existing and future demands.
TIM is engaged in replacing old copper cables by installing fiber optic cables. This is necessary to upgrade the low performing networks to the high-speed broadband networks. CDP is worrying about effectiveness of its investment. Palermo’s thoughts reflects the thoughts of the populist government which took office in June. The Government also thinks a single network would be more efficient. The Economy Minister Giovanni Tria has a different opinion and said it was a matter for private companies to decide.
Palermo, while addressing audience at a banking conference in Rome said he hoped the two main national players could collaborate to achieve this goal, but gave no further comment. CDP has a 50 percent stake in Open Fiber and around 5 percent of TIM.
Local media reports that the TIM and Open Fiber had signed a non-disclosure agreement that could include initial moves towards merging the two companies’ network assets. The agreement, which was signed earlier this week, is a continuation of a commercial accord signed in November by Open Fiber and TIM.
Open Fiber CEO Elisabetta Ripa said that her company was happy to consider possible synergies with TIM through commercial or co-investment agreements.
Open Fiber Investment
The Open Fiber has signed an agreement with San Dona di Piave city council to build a fiber-optic network in the northern Italian city in a total investment of around 5 million euros. Open Fiber plans to install around 150 kilometers of fiber-optic cable to bring FTTH services at speeds of up to 1Gbps to a over 14,000 households throughout the city. Open Fiber has connected 4.8 million homes in Italy as of now and plans for connections to around 19.5 million homes and businesses over the next 3 years.