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Italy could limit tenders operators can win in broadband rollout - sources

Italy considering cap in tenders for broadband rollout - sources
Italy considering cap in tenders for broadband rollout - sources   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Giuseppe Fonte</p> <p><span class="caps">ROME</span> -Italy could promote competition by capping the number of areas a broadband provider can win in tenders where high-speed services are offered by just a single operator, four sources close to the matter said.</p> <p>Innovation Minister Vittorio Colao is discussing the cap with European Union authorities as Rome prepares to deploy almost 7 billion euros ($8 billion) from the EU Recovery Fund to expand ultra-fast connectivity, the sources told Reuters.</p> <p>The country’s telecoms sector is currently in flux due to a proposal by U.S. private equity giant <span class="caps">KKR</span> to take over Italy’s biggest phone group Telecom Italia (<span class="caps">TIM</span>).</p> <p>One option on the table to ensure a competitive broadband environment envisages preventing any single bidder from securing more than half single-provider zones, also known as “grey areas”, two of the sources said.</p> <p>Brussels is informally pushing for the 50% cap, one source said, cautioning the scheme was not final and Rome could opt for a higher threshold with an up to 66% cap being considered.</p> <p>The approach to competition of Colao, the former Vodafone <span class="caps">CEO</span>, marks a U-turn from the previous government’s plan to merge the fixed line of sector incumbent <span class="caps">TIM</span> with that of rival Open Fiber, with <span class="caps">TIM</span> owning – at least initially – a majority stake in the combined entity.</p> <p>The single network project was on the cards last year when <span class="caps">KKR</span> spent 1.8 billion euros for a 37.5% stake in <span class="caps">TIM</span>’s last-mile network connecting street cabinets to people’s homes.</p> <p><span class="caps">KKR</span> has tabled a 10.8 billion euro non-binding, cash proposal for <span class="caps">TIM</span>, a move which sources have said aims to protect the U.S. fund’s investment in <span class="caps">TIM</span>’s grid.</p> <p>Under the EU-funded plan, Italy will cover part of the cost of the broadband infrastructure, probably up to 70%, leaving ownership of the networks to the operators that built it.</p> <p>To speed up the rollout without harming competition, Rome introduced a measure this month forcing operators to share installation costs if working in the same area and coordinate on permit requests.</p> <p>($1 = 0.8926 euros)</p> </div>