Italian government not wedded to single network

The Italian government this week made it clear that having a publicly-owned high-speed network covering the whole country is its end-goal, not necessarily bringing together the existing infrastructure into one single network.

The Ministry of Enterprises (MISE) published comments made by Minister Adolfo Urso to the lower house’s transport commission, in which he confirmed that the government is still seeking to create a single nationwide network. However, subsequent reports in the Italian press show that Urso’s comments were much broader than those shared by the Ministry, and in fact cast doubt on the ‘single’ nature of the network plan.

“The Minister confirmed the government’s intention to create a telecommunications network with nationwide coverage which would allow the country to achieve the objectives it has set for itself in a highly competitive international market, safeguarding employment levels,” MISE said, in an Italian language statement.

“Urso also communicated the start of an ongoing discussion table with the societal partners and local authorities for the entire telecommunications sector at the beginning of February,” it added. That comment clearly refers to the ‘working table’ the government pledged to set up late last year to hammer out the best solutions for a new national infrastructure plan following the collapse of the previous scheme to merge Open Fiber’s network with that of incumbent telco TIM.

The above seems pretty straightforward: everything is in hand and the various stakeholders are working towards a new plan, albeit perhaps not as quickly as the state would have liked. Indeed, Urso also commented on the pace of fibre rollout in Italy, particularly with regard to delays in Open Fiber’s rollouts to underserved areas.

But those reporting on the event added further detail, which essentially suggests that the new single network plan will not involve a single network at all.

Financial news agency Teleborsa quoted Urso as specifying that the objective “is not the creation of a single network, but of a national network under public control.” He added that the network should cover all Italian territory as soon as possible, especially disadvantaged areas.

And many other news outlets carried a similar message.

That’s a very different proposition to a single network, particularly the plan we expected to come together last year.

Naturally it gives rise to endless speculation as to how such a move could come about, the most obvious solution being the re-nationalisation of TIM’s network, in one form or another. As it stands, the government is TIM’s second largest shareholder, holding just under 10 percent via state lender Cassa Depositi e Prestiti (CDP), but it also retains a golden power that enables it to have a say in decisions that could be considered of national importance. Vivendi is still TIM’s biggest single shareholder with just under 24 percent, while foreign institutional investors are the biggest grouping with 44 percent.

Urso has CDP and Vivendi around the table and is preparing to add talks with TIM CEO Pietro Labriola, adds right-leaning publication Il Giornale. The paper also addresses the thorny issue of foreign ownership, quoting Urso as insisting that the idea of a state-controlled national network is not about pushing out foreign owners, but rather working for the common good.

The paper basically says that Urso’s stance downsizes the aims of foreign parties – and would-be suitors – particularly KKR, which has partnered with TIM, and Macquarie, which holds a 40 percent stake in Open Fiber to CDP’s 60 percent. The message appears to be that the government will accept foreign participation, but only in a minority way.

The government’s goal is pretty clear: a nationwide high-speed network controlled by the state. But brokering the required deals to get to that point will be a challenge indeed.

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