Italy Government Says EUR1.47 Billion Needed To Overcome Digital Divide

The Italian government plans to invest EUR1.47 billion for developing broadband coverage in the country, with the aim of overcoming the existing digital divide, undersecretary for telecommunication Paolo Romani said in a parliamentary hearing Tuesday.

Romani said the target is to ensure the entire population has access to broadband technology, with a speed of between two and 20 megabytes, by 2012.

The government official added that currently about 13% of Italians have no access to the Internet or insufficient bandwidth. The majority of these people live in rural and outlying areas.

The government plan on broadband follows a long-awaited report by consultant Francesco Caio, which was submitted to the government in March. The report, which was outlined by Caio Tuesday, includes several options to boost broadband coverage in the country, including the creation of a network company to help in the roll out of a nationwide high-speed broadband network.

Analysts and investors have been focusing on the report for its potential impact on Telecom Italia SpA (TIT.MI), Italy's largest telecoms operator which relies on the network as a key asset.

-By Giada Zampano, Dow Jones Newswires; [phone]; [e-mail]