Enel Open Fiber to Share Networks with Vodafone and Wind

Italian Electricity company Enel is gearing towards an agreement with mobile operators Vodafone and Wind over its plans to help develop a national fiber-optic broadband network Enel was pushed by the government authorities to engage in the deployment high-speed broadband networks in Italy The utility company will use its existing infrastructures to deploy fiber optic cables that will help the faster rollout of broadband to the rural areas.

Since Prime Minister Matteo Renzi made the development of a nationwide fiber network a government priority Enel has offered to use its domestic electricity transmission infrastructure to install optical fiber cables straight to the homes and offices. Enel had named its fiber optic broadband network service, Enel Open Fiber.

The state-owned power utility company, Enel is about to start installing a new generation of smart electricity meters into 33 million Italian homes and has proposed laying fiber in its pipes at the same time.

Realizing the slow activities of the incumbent telecom operator Telecom Italia in deploying optical fiber cables, government authorities were convincing Enel to take action to help the faster deployment of broadband networks. However, the proposal has caused some friction with Telecom Italia which has its own plans for connecting the country’s homes up to ultrafast broadband.

The chief executive of Enel, Mr. Starace told parliament’s industry committee on Wednesday that Enel’s proposal would cost 30-40 percent less than building a new fiber-optic network from scratch. Enel will use existing poles and ducts to deploy fiber optic cables. It is estimated that approximately 60 percent of the FTTH deployment cost comes from civil construction including material and manpower costs.

Vodafone and Wind would be commercial partners paying a rental fee to use the cables rather than be shareholders in Enel Open Fiber, the vehicle created to manage the project, he said.

Starace said the vehicle would be open to other operators, adding talks with Telecom Italia and Swisscom’s local broadband subsidiary Fastweb were continuing while small Italian broadband firm Metroweb was also interested.

Shareholders in Enel Open Fiber would be primarily financial and would not be more than two, he said.

Enel has plans to duplicate similar services in countries where Enel operates power distribution infrastructure such as in Latin America, Spain, and Romania.

Telecom Italia is separately talking with Metroweb over bringing fiber-to-the-home to 250 Italian cities and the two companies have submitted a joint proposal to the regulator for approval.

Wind Telecommunicazioni is currently trying to get approval from the EU’s competition regulators to merge with CK Hutchison’s 3 Italia, the smallest of Italy’s four mobile network operators.

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