EU could oppose Italy’s single fiber network plan – report | Light Reading

EU could oppose Italy’s single fiber network plan – report | Light Reading

Opposition to Italy’s aim to create a single fiber network controlled by Telecom Italia appears to be mounting, with a report suggesting that European Union competition officials are not in favor of the plans.

Telecom Italia only recently confirmed the plan to create a single fiber network through an integration with state-backed rival Open Fiber.

Light fantastic: The EU appears to be unhappy with Telecom Italia's broadband plans.

Light fantastic: The EU appears to be unhappy with Telecom Italia’s broadband plans.

The aim is to create a new company called AccessCo, which will integrate Telecom Italia’s new FiberCop unit with Open Fiber.

Under the terms of the agreement, Telecom Italia will own at least 50.1% of AccessCo, which will incorporate its secondary and primary networks as well as Open Fiber.

Monopoly concerns

Nick Read, CEO of Vodafone Group, has already voiced concerns, saying a return to a monopoly in Italy would be a “giant step backward” in a market where creating any form of fixed-line competition “has been notoriously difficult.”

Now, Bloomberg, citing unidentified sources, has reported that EU competition officials led by Margrethe Vestager are also said to be concerned that the merger of Telecom Italia’s fixed network with Open Fiber will create a monopoly, “reversing two decades of deregulation.”

The EU officials are said to be particularly wary of the fact that Telecom Italia is to remain in control of the new company.

Telecom Italia, as well as Open Fiber shareholder and state lender Cassa Depositi e Prestiti (CDP), have been at pains to stress that the “independence and third-party status” of the new company will be guaranteed by a shared governance mechanism with CPD Equity. CPD said AccessCo would be open to other investors.

However, it’s not clear whether such assurances would assuage EU concerns, raising the possibility that a deal could potentially be blocked.

Fiber frenzy

The idea of unifying the country’s landline infrastructure has strong backing from Italy’s government, under the current leadership of Prime Minister Giuseppe Conte.

The current objective is to cover 56% of all properties with a FTTH network by 2025, avoiding the duplication of existing efforts by Telecom Italias FlashFiber and Open Fiber.

Want to know more about optical? Check out our dedicated optical channel here on Light Reading.

According to the FTTH Council Europe, Italy was ranked 30th out of 35 countries in terms of fiber-to-the-home/building (FTTH/B) penetration (FTTH/B subscriptions/households), with a rate of just 4.1% as of September 2019. However, Germany was even lower at only 3.3%.

Nevertheless, Italy was said to be the fifth-fastest market in terms of FTTH/B sockets deployed, rising 4.7 million in the year from September 2018 to September 2019.

Its coverage rate was 30.6%. The number of subscribers was also said to have risen by 45.3% in the 12-month period.

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Anne Morris, contributing editor, special to Light Reading

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