UPDATE: Italy Operators To Sign MOU On Broadband Infrastructure

Italian telecoms operators are close to signing a memorandum of understanding (MOU) on the creation of a new company to build up high-speed broadband infrastructure, Industry Minister Paolo Romani said Wednesday.

"The memorandum will be signed in a few days, and will see the participation of all the operators," Romani said at a telecoms conference in the capital.

He added the new company will be responsible for building up basic fiber-optic infrastructure, but then will leave all the operators free to choose different solutions to offer their own broadband services.

The Italian government and the main telecoms operators have long debated the best way to expand access to high-speed broadband across the country, as Italy lags the rest of Europe in broadband penetration.

But questions over financing and former monopoly Telecom Italia SpA's (TI) refusal to share control over its key fixed-line network have delayed the country's broadband plans.

Romani Wednesday invited all the operators to "be brave and take risks," anticipating and encouraging the growth for high-speed broadband demand in the country.

Italy's alternative operators Fastweb SpA (FWB.MI), Wind and Vodafone Italia (VOD) earlier this year announced plans to jointly invest EUR2.5 billion over a five-year period to build fiber in Italy's 15 largest cities, covering about 10 million more people.

Telecom Italia, however, dismissed calls to join the rival broadband project and said it will push ahead with its own plans to offer 100 megabits per second broadband to 50% of the Italian population by 2018, pledging to invest EUR9 billion in its network infrastructure by 2012.

The head of Italy's telecoms regulator AGCOM Wednesday welcomed the news of an imminent agreement among operators to create a new company for broadband infrastructure, adding a common project is crucial to allow State-controlled fund Cassa Depositi e Prestiti (CdP) to play a role in it.

"CdP won't necessarily have to participate in the new company's capital, but may also contribute by providing subsidized loans," Corrado Calabro said in his speech at the Rome conference.

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