On 26 July, Fastweb and Telecom Italia Mobile (TIM) announced that they would invest €1.2billion to build a fibre to the home (FTTH) network bringing gigabit speeds to 20 per cent of Italian homes and businesses by 2020.
The construction of the fibre network will be realised through a joint venture, 80 per cent owned by TIM, that will be financed through a mixture of debt and equity. Fastweb will contribute about €55 million to the project over the next four years, self-financed by its own cash flow.
By 2020 the partners aim to connect three million housing units in the main 29 cities in Italy that have already been covered with fibre to the cabinet (FTTC).
The joint venture plans to exploit the fibre infrastructure already laid by Fastweb up to the street cabinets, and will not therefore duplicate the previous investments, the partners point out.
On behalf of the two companies, the joint venture will carry out new civil works, laying optical fibres from street cabinets up to the customer premises. This will allow the two operators to share excavation costs, establish quality standards for the joint network, and offer a greater choice of services to the end customer.
Fastweb had previously promises to expand its ultra-fast broadband network to 50 per cent of the population by 2020. As a result of this agreement with TIM, the mix will change: the FTTC footprint will increase from 5.5 million homes and businesses by the end of 2016 to 8 million (instead of the 11 million initially planned) while the FTTH coverage will rise from two million to five million.
Both operators provide wholesale access to their infrastructure, and say their venture will significantly increase the level of competition in this segment.
Commenting on the announcement, Alberto Calcagno, CEO of Fastweb, said: ‘With this agreement Fastweb confirms its commitment to the infrastructure development of the country through an industrial project in which the company will be featured. Our position in the ultra-broadband market, where we are co-leaders, will be further strengthened thanks to the quality and connection speeds that will provide our customers.’