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85% of Italy Will Get Fiber to the Home Broadband Service Within Six Years

Phillip Dampier May 14, 2015 Broadband Speed, Competition, Consumer News, Public Policy & Gov't No Comments

enelItaly’s power utility Enel has offered to help the country build a massive fiber to the home broadband network capable of bringing ultrafast Internet speeds to 85% of the country within six years if it can sort out a potential conflict with Telecom Italia, the country’s largest telecom company.

Enel, still controlled by the Italian government, volunteered its domestic network infrastructure to help install fiber optics more cheaply than Telecom Italia could manage on its own, especially in rural and industrial areas.

The offer is controversial because it could put the new fiber network under public control by using Enel, whereas Telecom Italia is a publicly traded company now majority controlled by Spain’s Telefónica and several Italian banks.

Enel, which is focusing much of its domestic strategy on developing its power distribution grid and smart digital technology, has about 1.2 million kilometers of power lines and 450,000 power distribution cabinets across Italy. Smart grid technology is often dependent on fiber optic communications, so making room for Italy’s Metroweb fiber network seemed easy enough.

Prime Minister Matteo Renzi is backing the $13.35 billion project under the Metroweb brand, a company partly owned by state lender Cassa Depositi e Prestiti (CDP).

telecom italiaSuch a deal could potentially lock out Telecom Italia, which is already upset with the government over ownership issues, technology and its inability to buy into the Metroweb project.

Enel insists their involvement would be “synergistic with what the telecom operators have done and planned,” not in competition with those efforts. But Telecom Italia remains concerned it could be left behind by a project that would likely dominate Italian telecommunications for decades.

This isn’t the first venture into telecommunications Enel has made. The power company earlier launched Wind, the third biggest of Italy’s four mobile network operators, which is today owned by Vimpelcom.

Telecom Italia is widely blamed for Italy’s lagging broadband rankings, having failed to invest in up-to-date network technology because of the company’s high debt and falling revenues. Fewer than 1 percent of Italians with an Internet subscription receive connection speeds of at least 30 megabits per second, according to the Agcom communications authority. That compares with the European average of 21 percent. The Italian government considers anything short of a modern fiber optic network a drag on the country’s competitiveness and wants the network built as fast as possible.

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