July 26, 2018 / 1:31 PM / 3 months ago

Italy interested in single wholesale broadband network company

ROME (Reuters) - The Italian government is looking into the idea of creating a single company to roll out a wholesale ultrafast broadband network, the Industry Minister said on Thursday.

Speaking in parliament, Luigi di Maio said Rome was studying the advantages of a potential spin-off of Telecom Italia’s (TIM) fixed line network.

Phone incumbent TIM and broadband infrastructure rival Open Fiber are both building fiber optic networks across Italy.

Concern has been expressed the rivalry could lead to a mutually damaging war where TIM and Open Fiber both lose money and infrastructure is duplicated.

“We are looking at the Open Fiber model but for the spin-off of the network we need to understand what we’re talking about, we’re talking of a corporate asset,” Di Maio said.

The Italian government, through state lender Cassa Depositi e Prestiti, is joint owner of Open Fiber alongside utility Enel, and owns a stake of more than 4 percent in TIM.

In March, TIM officially kicked off a process to put its fixed-line network into a legally separate company but has said it plans to keep full control.

TIM CEO Amos Genish has said he is ready to cooperate with Open Fiber. Enel, while open to cooperation, has ruled out the idea of any merger of the two wholesale network businesses.

The anti-establishment 5-Star Movement, part of Italy’s ruling coalition with the far-right League, has previously said it is in favor of a single network operator under public control.

Di Maio, leader of the 5 Star Movement, told Parliament the government was looking “with interest” at initiatives aimed at creating a single wholesale-only network that would allow retail operators to compete on services.

“Our aim is to approach the issue with a view to guaranteeing national security,” Di Maio said.

He said the government would use 1.3 billion euros of available resources immediately to stimulate demand for broadband demand.

Rome has long been pushing for an all-fiber optic network to be rolled out to boost productivity across a country with the lowest take-up of fixed broadband in Europe.

Reporting by Giuseppe Fonte, writing by Stephen Jewkes; Editing by Jan Harvey

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