Enel, the Italian power service company, is planning to expend 2.5 billion euros (£2 billion) on supplying every home in the country with fibre optic cables, an action that may force Telecom Italia to move forward with its own efforts to build a fibre broadband network within the country.
The service provider, which is controlled by the state, stated on Wednesday that it proposes to install fibre in homes along with its power network, spreading across 224 municipalities and offer the service as a wholesale product to telecom service providers.
Enel is currently discussing plans to enter into a commercial partnership with mobile networks Vodafone and VimpelCom’s Wind. However, the CEO of Enel, Francesco Starace stated that they are not willing to become investors in Enel Open Fiber (EOF), the unit appointed to finalise the project.
“EOF equity remains open to investors, but mainly infrastructure funds.”
The plans of Enel, when they were first identified last year, created some abrasion with Telecom Italia, who was a monopoly network operator until last year and is still working on its own course of plan to connect the entire country with its extremely fast broadband.
The company, who’s majority shareholder is the French media giant Vivendi, has promised to inject 12 billion euros into Italy according to the latest three-year business plan, including 3.6 billion euros on laying fibre optic cables.
Analysts stated that using Enel’s high-speed internet network could create stronger competition for Telecom Italia as other providers rush to offer the service.
Starace said in a conference call while sharing the company’s results:
“It’s the cheapest solution to get (fibre) to homes and factories.”
Enel will start working on the project this year for the installation of a new generation of smart electricity meters in 33 million homes and plans to lay fibre via its pipes simultaneously.
EOF will complete the fibre network in various stages, approximately 7.5 million homes will have fibre network in the first few years.