Following the feet of Enel, the Italian utility company, Italian state railway company has offered its facilities to roll out national fiber optic broadband network. Last week, the Italian media reported Enel’s offer to help build national fiber optic network, a move generally perceived as a threat to the business of Telecom Italia.
Sources reports that Italian government authorities are unhappy with the progress of broadband deployment in the country. High speed broadband delivery is a key to the nation building as well as to boost overall economy. Investment in high speed broadband networks are reported to increase the gross domestic product of a country. Though the growth in GDP varies from country to country, it is a generally accepted fact that typically it contributes to the growth of around 1.5%.
Telecom Italia has been trying to accelerate fiber optic broadband by pushing Telecom Italia. Telecom Italia has been in talks with domestic service providers such as Metroweb for a possible acquisition that will enable Telecom Italia to have ownership on Metroweb’s networks. Local newspapers reported that the talks with Metroweb had gone in the wrong direction. Metroweb’s owner was not happy with the direction of discussions with Telecom Italia. Ever since the failure of talks with Metroweb was reported, authorities have been thinking of alternative ways to build national fiber optic network in Italy.
Enel came up to the rescue of Italian government, offering to build fiber optic infrastructures utilizing its existing electricity and gas infrastructures. It is a known fact that utility companies that own extensive duct and aerial infrastructures can drastically reduce the civil works cost of FTTx deployment. Studies conducted by FTTH Councils reveals that almost 68 percent of the deployment cost goes to the civil works. The cost for fiber optic cables is merely 6 percent. Fiber deployments utilizing the existing infrastructures would be economically viable to deliver high speed broadband to the all sections of the society.
Michele Mario Elia, CEO of Ferrovie Dello Stato, said the company is ready and available to share the railway network to help expand the provision of fiber optics in Italy. Italian Railway has over 9,000 kilometers railway networks. A few hundred kilometers of this railway networks have already been covered with fiber optic cables from Basictel. Those fiber optic cable networks have been used for internal use of railway department. Though the head of Italian Railways offered to extend the support, there had been no specific approach made regarding the possible project.
Elia’s comments came after the media reports that utility company Enel had written officially to the communications regulator AGCOM to offer its domestic gas and electricity networks to help develop the country’s broadband infrastructure. The chairman of Italy’s state-backed holding company Cassa Depositi e Prestiti (CDP), later backed the idea, declaring to Rai that there could be synergies between Enel and the operators. Enel could be one of the candidates, alongside Metroweb and others, competing to bring fiber to areas that Telecom Italia has no interest in covering. Though not in direct competition, it reduces the chance for Telecom Italia’s wide coverage of Italian population.