Vodafone and Wind, two telecom service providers in Italy have signed a letter of intent with fiber optic broadband network service provider Metroweb to build fiber optic networks throughout the country. Italian government has been searching ways to build nationwide fiber optic networks to effectively deliver high speed broadband services.
Telecom Italia has been in talks with Metroweb, but could not succeed in their attempt to convince Metroweb to proceed with mutual agreement for building and delivering fiber optic broadband network services. Government was unhappy the way the talks proceeded and has been thinking alternative ways to build next generation networks in the country. The utility company Enel had come with a proposal to utilize its existing utility infrastructure to build fiber optic networks that will eventually reduce deployment cost and cost of high speed broadband in the country. Italian Railways later announced their willingness to extend help to build networks.
Vodafone is a Britain based global telecom service provide and Wind is the mobile telephone unit of Vimpelcom. Both these companies have signed a letter of intent with shareholders of broadband firm Metroweb to build a fibee optic network in Italy, the companies said in a joint statement.
Italy has one of the oldest telephone network in place with copper telephone wires connecting to the telephone exchanges and homes. Replacing these legacy networks is a time and money consuming project that the government wants to initiate and accelerate as soon as possible. Though Telecom Italia has been actively deploying the Fiber to the Cabinet networks to provide high speed broadband services at a speed of 30 Mbps, the authorities wants more active players to speed up the work. The agreement comes as Italian Prime Minister Matteo Renzi is pushing to upgrade the country’s aging phone infrastructure in a 12-billion-euro plan he considers vital to modernize the economy.
Government looks Metroweb as a building block for the multi billion euro project to deploy fiber optic networks throughout the country. Metroweb is partly owned by the state and has attracted takeover interest from former phone monopoly Telecom Italia.
In the statement issued, the Vodafone and Wind said the project was open to other operators and investors ready to pursue the goals set by the government. A decree detailing the broadband plan is expected in the coming days.
Telecom Italia had proposed a gradual take-over of Metroweb. But its proposal was rejected by the company’s state owners who favor opening up the capital of Metroweb to all operators.
Newspaper reports suggest that if the letter of intent leads to a deal, this would put pressure on Telecom Italia, which is going ahead with its own investment plan to upgrade its copper network and bring faster Internet connections to Italian consumers. The statement did not mention any time-frame for any agreement nor the size of the possible joint investment.