Italy to impose cap in tender for broadband rollout, sources say

ROME, Jan 13 (Reuters) - Italy plans to cap the number of lots a broadband provider or a consortium of operators can win in public tenders to expand ultra-fast connectivity across the country, three sources close to the matter told Reuters.

The government is preparing to divide the areas put out to tender into 15 lots and wants to prevent a single bidder from winning more than eight of them, the sources said, cautioning that the terms were not yet finalised.

Rome will deploy 3.8 billion euros ($4.36 billion) of European Union recovery funds to ensure the whole of the country can access 1 gigabyte per second fixed Internet connectivity by 2026.

The programme is part of government efforts to develop Italy’s digital economy, which lags those of its major European peers.

European Union authorities informally urged Italy to set a 50% cap on broadband lots that can be assigned to single firms or consortiums to ensure competition is preserved, Reuters reported in November.

The idea of a cap is consistent with the line favoured by Innovation Minister Vittorio Colao, a former Vodafone CEO, who has said protecting competition is the best way to promote ultra fast fibre rollout.

Colao’s office said it planned to publish the call for tenders by the end of January, and the sources told Reuters they may be issued as soon as Friday. Rome plans to award the contracts by June.

The funding scheme aims to cover about 7 million homes where no broadband operator offers or plans to offer download connectivity of at least 300 Megabits per second.

The tender process comes as Italy’s telecoms sector is in flux due to a proposal by U.S. private equity giant KKR to take over Telecom Italia (TIM).

$1 = 0.8724 euros Reporting by Giuseppe Fonte and Elvira Pollina, editing by Gavin Jones, Kirsten Donovan