MILAN, April 1 (Reuters) - FiberCop, created to manage Telecom Italia’s (TIM) ‘last mile’ grid and open it up to other operators, became fully operational on Thursday, as the country’s biggest phone group leads efforts to close a digital divide with the rest of Europe.
In 2019, Italy ranked 24 out of 28 European Union member states in its take-up of ultrafast internet of at least 100 megabytes, the Digital Economy and Society Index (DESI) found.
FiberCop, into which TIM transferred its copper last mile network connecting street cabinets to people’s homes and also the fiber assets from a joint venture with Fastweb, is meant to help facilitate a switch to fast fibre connectivity.
It went live on Thursday after U.S. infrastructure fund KKR finalised its acquisition of 37.5% of FiberCop from TIM for 1.8 billion euros ($2.11 billion), TIM, Fastweb and KKR said in a joint statement.
In addition, Swisscom unit Fastweb underwrote FiberCop shares worth 4.5% by transferring the 20% it held in FlashFiber, a fibre network joint venture with TIM, into FiberCop.
FiberCop will not require capital injections from shareholders, the companies said, adding it was expected to reach earnings before interest, tax, depreciation and amortisation (EBITDA) of 0.9 billion euros on a full-year basis.
Massimo Sarmi, formerly a CEO at Poste Italiane, will be chairman at FiberCop and Carlo Filangieri, a long-term TIM manager, will be CEO.
Its aim is to ensure connection speeds of up to 1 gigabite for 76% of properties in the so-called grey and black areas of Italy by 2025, the companies said. Those mainly cover large cities and small towns and exclude non-economically viable areas.
The new company is a first step towards a government plan to create a single network by merging FiberCop into state-backed Open Fiber.
Open Fiber is a wholesale-only ultra-broadband jointly owned by Italy’s biggest utility Enel and state lender Cassa Depositi e Prestiti (CDP).
But the plans for a single operator have yet to be finalised, with questions around governance seen as one of the hurdles.
Sources told Reuters on Wednesday Italy was considering a new scheme to win control of Open Fiber.
Under Prime Minister Mario Draghi, who took office this year, Italy’s government has put digital infrastructure at the heart of the agenda, but some of his ministers have cast doubt on the project for a single network.
$1 = 0.8535 euros Reporting by Maria Pia Quaglia; editing by Barbara Lewis