FTTH in Italy benefits from carrier tie-ups

A pair of carrier tie-ups last week has reshaped the landscape of Italy's fiber to the home (FTTH) market. On July 26, Fastweb and Telecom Italia (TIM) announced a partnership aimed at gigabit fiber-optic broadband expansion. Two days later, Italian utility Enel SpA agreed to acquire fiber-centric service provider Metroweb Italia SpA, which it will combine with its Enel OpEn Fiber SpA (EOF) subsidiary. Enel has set aside 714 million euros for the acquisition.

Fastweb and TIM will create a joint venture operation, 80% controlled by TIM, that will spend 1.2 billion euros to upgrade 3 million housing units in 29 cities from fiber to the cabinet (FTTC) to fiber to the premises (FTTP) by 2020.

Fastweb will contribute 55 million euros to the effort. The joint venture is part of a company initiative to offer high-speed broadband access to 50% of Italy's population by 2020 through a combination of network architectures. The agreement with TIM means Fastweb now plans to increase premises passed via FTTC from 5.5 million to 8 million (instead of the 11 million initially planned); the FTTP footprint will rise from 2 million to 5 million.

Meanwhile, Enel will share ownership of EOF with CDP Equity SpA; F2i SGR SpA will have the option to take as much as a 30% stake in EOF as well that it must exercise by October 15, 2016.

EOF will now be expected to deploy FTTH networks in 250 cities, up from its original target of 224. Enel notes that Metroweb has already deploy fiber-optic cable in Milan and is laying cable in Bologna and Turin in announcing the new targets. EOF will seek to pass 9.5 million homes (versus its previous goal of 7.5 million homes) from 2016 to 2021.

Enel says that the final phase of FTTH deployment in the first 10 cities under its strategic plan – Bari, Cagliari, Catania, Florence, Genoa, Naples, Padua, Palermo, Perugia and Venice – is expected to begin in the second quarter of 2017. The company expects EOF to finish work in these cities in the first quarter of 2019.

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