Vodafone to launch Italy fibre optic grid

MILAN, ITALY: Telecoms groups Vodafone Group Plc, Fastweb and Wind agreed to build their own 2.5 billion euro ($3.4 billion) fibre optic network in Italy, they said on Friday, taking the lead away from former monopoly Telecom Italia.

The network would reach 15 cities over five years, the companies said in a statement. The grid would be open to private and public partners including Telecom Italia SpA.

Telecom Italia's chief executive, Franco Bernabe, had said on Thursday he welcomed the initiative but would not change his company's investment plans which call for a move to fibre optic based on demand.

The project could be extended to reach up to half of Italy's 60 million people at an investment of 8.5 billion euros, it said.

Italy has long debated the need to roll out a nationwide fibre optic network to improve competitiveness. But no concrete project has been pushed through, partly because of funding hurdles.

Paolo Bertoluzzo, chief executive of Vodafone in Italy, told a news conference the group would welcome the participation of state finance arm Cassa Depositi e Prestiti in the project.

Fastweb, Italy's number-two broadband operator, is owned by Swisscom AG. Wind is controlled by Egypt's Weather Investments, a vehicle of tycoon Naguib Sawiris.