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UPDATE 2-Italy needs to resolve stalemate over network project to avoid broadband delays - minister

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MILAN, March 18 (Reuters) - Italy needs to resolve a stalemate over its long-delayed project to create a unified network operator as soon as possible to avoid holding up its broadband rollout plan, Innovation Minister Vittorio Colao said on Thursday.

Rome has been trying to create a national network by merging Open Fiber, a small broadband operator owned by state lender CDP and utility Enel, with the landline grid assets of former phone monopoly Telecom Italia (TIM)

But the plan, for which TIM and CDP struck a preliminary accord last year, has not been finalised yet as negotiations between parties stalled.

The new government led by Mario Draghi has yet to clarify whether it intends to implement it and under what terms.

“We can’t afford to be in a wait-and-see situation which risks threatening the plans and the timing for the broadband rollout, funded by the European recovery plan,” Colao said during a parliamentary hearing.

“We need to reach a solution in order to ensure a speed-up in rollout activities”, said the minister, former head of telecoms firm Vodafone. Italy’s plan was to ensure fast connectivity across the whole country by 2026, he added.

On Wednesday, Industry Minister Giancarlo Giorgetti said Italy would re-examine the previous government’s planned single broadband network project to ensure it is feasible. .

Colao said he would work with Giorgetti and Economy Minister Daniele Franco to “unblock the stalemate on the project” and avoid inefficient allocation of the EU recovery funds available to boost fast connectivity.

He said they were also working on other options, and that boosting 5G and radio connectivity and favouring other kinds partnerships between operators were alternatives should the stalemate on the single network project remain.

The minister said the funds from the European Next Generation loan scheme allocated to digitalisation projects would be “significantly” above 40 billion euros ($47.7 billion). (Reporting by Elvira Pollina; Writing by Maria Pia Quaglia; Editing by Giulia Segreti and Jan Harvey)

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