Italy Said to Discuss $4.6 Billion Fiber-Network Incentives

By Daniele

Italy’s government is studying a 4 billion-euro ($4.6 billion) incentive program to encourage phone companies to expand high-speed fiber-optic networks in the country, according to people familiar with the matter.
A meeting to discuss the six-year plan is scheduled at the government headquarters in Rome today, said the people, who asked not to be identified because the gathering is private. At least 2 billion euros of the total will probably be earmarked for network expansion in rural areas, said two of the people.
The numbers are preliminary as Italy is considering drawing from an additional 2.4 billion euros of European regional development funds, said one of the people. The mechanism of the program and eligibility will also be debated at the meeting, the people said.
Telecom Italia SpA (TIT) and Vodafone Group Plc (VOD)’s local unit are among companies that may benefit from the plan as more Italians download content such as videos on their smartphones and tablets, putting strain on carriers’ networks. Fewer than
1 percent of Italians with an Internet subscription receive connection speeds of at least 30 megabits per second, according to the Agcom communications authority. That compares with the European average of 21 percent.

Meeting Attendees

A representative for the government declined to comment on the meeting or the program.
Participants will include Italy’s deputy general secretary Raffaele Tiscar; Antonello Giacomelli, an undersecretary at the Economic Development Ministry who is responsible for communications policy; and Franco Bassanini, chairman of Italian state lender Cassa Depositi e Prestiti SpA, two of the people said. Former Luxottica Group SpA Chief Executive Officer Andrea Guerra may also join the meeting as an adviser, one of the people said.
The need to bolster transmission bandwidth underscores acquisitions of landline and cable assets such as Jazztel Plc and Grupo Corporativo ONO in Spain and Kabel Deutschland Holding AG in Germany in the past two years.
Vodafone is adding faster mobile technology and broadband Internet lines -- spending a total of 19 billion pounds ($29 billion) through March 2016 -- in a network-improvement plan called Project Spring. Deutsche Telekom AG, Europe’s biggest integrated carrier, has said it will keep spending on broadband and wireless networks once it completes a three-year global investment program worth almost 30 billion euros this year.
Telecom Italia shares climbed 0.3 percent to 94.3 euro cents at 9:03 a.m. in Milan. Vodafone added 0.8 percent to 231.90 pence in London.