By Manuela Mesco
MILAN--The Italian government said late Tuesday that it will
invest over 6 billion euros ($6.72 billion) in public funds to help
upgrade the country's lagging broadband infrastructure, hoping
private investments will follow.
If pursued, the plan could help resolve the long-standing issue
of Italy's digital underdevelopment. The country is among those
with the lowest penetration for fast broadband in Europe,
representing only 2% of total Internet subscriptions in 2014
against the European average of 22%, according to European
Commission data. The EU Commission is aiming for at least half of
each member country's households to subscribe to ultra-fast
broadband connections by 2020.
According to the plan presented on Tuesday, public funds in
Italy will be used to create incentives for telecom players to
invest in the network. The money will finance lower taxation for
private companies that pour money into remote areas of the country
where building infrastructure is expensive and demand isn't strong
enough to support it.
But the government's public funds are intended mainly to boost
investment by private telecom operators, such as Telecom Italia SpA
(TIT.MI) or Vodafone Group PLC's (VOD.LN) Italian branch, whose
efforts to invest in the Italian broadband network have failed to
produce significant results so far.
Telecom Italia said in February that it will invest about EUR3
billion by 2017 to develop Italian optic fiber networks, within a
total investment of EUR10 billion in the country. Vodafone Italia
has already invested EUR3.6 billion in Italy in the past two years
and Chief Executive Aldo Bisio said that investments will increase
this year.
The network upgrade will mean in the future a smooth switch-off
of Telecom Italia's copper network, one of the company's most
important assets, as the population should move to faster Internet
networks, a government spokesman said. The move should happen only
when most of the population has already migrated to faster
networks, the spokesman added.
-Write to Manuela Mesco at manuela.mesco@wsj.com
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