2nd UPDATE:T.Italia Snubs Rival Plan, To Lift Ultra Broadband

10th Jun 2010 17:03

(Adds detail and background.) By Giada Zampano Of DOW JONES NEWSWIRES NAPLES (Dow Jones)--Telecom Italia SpA (TIT.MI), Italy's largest telecommunications operator, Thursday dismissed calls for joining a rival broadband project, telling regulators that it will push ahead with its own plans to offer ultra broadband services to 50% of the Italian population by 2018. Telecom Italia pledged to reach half of the Italian population with 1OO megabit fiber optic infrastructure, able to deliver high-speed services and huge amount of data. It didn't specify the amount of this investment. After a hearing with telecoms regulator Agcom in Naples, Telecom Italia Chief Executive Franco Bernabe told reporters the company wants to stick to its investment plans, which include investing EUR7 billion on the fixed-line network upgrade in the next three years. He added that Telecom Italia also asked Agcom for the go-ahead to start selling ultra broadband services in Italy's main cities Milan and Rome. Telecom Italia's pledges follow an alternative plan by rival operators Fastweb (FWB.MI), Vodafone Group PLC (VOD), Wind SpA and Tiscali (TIS.MI) to invest EUR2.5 billion to bring broadband to Italy's 15 largest cities in the next five years. Asked about the rivals' plan, Bernabe said: "We know there's a plan by alternative operators, but we're going ahead with our plan." Italy's government and regulator Agcom have repeatedly called for a common effort by Italy's telecoms operators to boost broadband investment in the country, but Telecom Italia has always said it isn't willing to share control of its key copper and broadband infrastructure with other operators. One of Telecom Italia's main shareholders, Italian bank Intesa Sanpaolo (ISP.MI), recently joined the calls for a common effort aimed at building up a next-generation network in Italy, suggesting that Telecom Italia should just band together with smaller rivals, rather than trying to finance a fiber-optic high-speed network on its own. Agcom head Corrado Calabro welcomed Telecom Italia's investment plans Thursday, but reiterated "the widest cooperation among all private and public parties involved is crucial to reach a common project," which is seen as vital for the country's economy. Analysts have expressed doubts on the ability of Italy's former monopoly to earmark wide financial resources for a high-speed broadband network, as it focuses on slashing its EUR33 billion debt load. On the other hand, the alternative operators have asked the Italian government to start the process allowing for the creation of a fiber-optic company with both operators and public bodies as investors. In particular, they hope Cassa Depositi e Prestiti SpA (CdP), a state-controlled fund in which Italy's banks also have stakes, would join the project. The alternative operators have said the plan might be expanded to include up to EUR8.5 billion in investment so as to cover all Italian towns with more than 20,000 inhabitants, or around 50% of the population. They have repeatedly said the project is open to Telecom Italia and to any other interested party. -By Giada Zampano, Dow Jones Newswires, +39 348 7678 016; [email protected] (END) Dow Jones Newswires June 10, 2010 12:03 ET (16:03 GMT)