Italian energy firm Enel is reportedly in advanced talks to merge its fiber-optic unit with dark fiber provider Metroweb as it prepares to build out a nationwide broadband network. Investors in Metroweb, which Telecom Italia is also targeting, reportedly want control of the enlarged entity.
Italian energy firm Enel (BIT:ENEL) is reportedly in advanced talks to merge its fiber-optic unit with dark fiber provider Metroweb as it prepares to build out a nationwide broadband network.
Enel OpEn Fiber (EOF), which the partly state-owned company created late last year to build the ultra-fast network, and Metroweb met in Milan on 8 April with their financial advisers to discuss a potential tie-up, Bloomberg cited people familiar saying.
Investors in Metroweb, which Telecom Italia (TIM) (BIT:TIT) is also targeting, want control of the enlarged entity, the report stated.
Enel and Metroweb have declined to comment.
Enel CEO Francesco Starace was cited by local and international media at a government press conference in Rome on 7 April saying that the company is partnering with TIM rivals Vodafone Italia and VimpelCom’s Wind Telecomunicazioni on the project and would like TIM to participate too.
Enel announced in March that it plans to spend about €2.5bn (US$2.8bn) to build a fiber-optic network across Italy.
The company is looking to deploy FTTH services in 224 Italian municipalities in several phases and initially reach some 7.5 million homes.
EOF will operate as a wholesale-only player and build infrastructure for other licensed operators.
Earlier this week, media reports claimed that the Enel project could lead to some 15,000 job losses at TIM – something the Italian telco’s largest shareholder, French media company Vivendi, has since denied.
Vodafone, Wind and Metroweb had previously discussed building out a nationwide fiber optic network. They had invited TIM to participate as a partner but the incumbent said it wanted to lead its own plan. TIM said in February that it was aiming to reach 84% fiber coverage by 2018.
In mid-February, Milan-based Metroweb lined up a reported 15 banks to help finance a €750m-€800m (US$832m-US$887) plan to deploy cable in 10 cities. The company is owned by Fastweb (10.6%) and Metroweb Italia (87%), which is itself owned by infrastructure fund F2i (54%) and CDP’s Fondo Strategico Italiano (46.2%)
At the press conference, Starace was cited saying Enel will choose financial partners for EOF after the summer.
The first phase of the rollout, set to begin in mid-May, will involve 10 cities, the first five being Perugia, Cagliari, Bari, Venice and Catania, he said. Next up will be Florence, Genoa, Naples, Padua and Palermo.
The second phase will involve 40 cities, he said, without specifying a timeframe.