Page 34 - Trends in Telecommunication Reform 2016

Italian Prime Minister Matteo Renzi has begun an capacity broadband and services. Several years
ambitious plan to bring super-fast broadband to later, however, it began looking to divest all or
85 per cent of Italy’s consumers by 2020. Fixed part of its holding. Consequently, Telecom Italia
broadband take-up in Italy is 23 per cent compared and Vodafone became interested in acquiring a
to an EU average of 31 per cent. The percentage controlling stake in Metroweb, which was valued
of customers with fixed broadband download at approximately EUR 400 million .
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speeds greater than 30Mbit/s is just 2 per cent –
significantly below the EU average of 23 per cent .
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Mr. Renzi sees Metroweb, which generates sales 1.3.5 Public DBOs
of just USD 74 million, as a good vehicle to achieve
his ambitious plans. The public DBO investment model is an extension
of the public outsourcing model. It requires
Metroweb is an example of an SPV in which the greatest level of involvement and financial
ownership of the network is split between the contribution from the government and minimizes
public and private sectors. It was conceived private-sector involvement and investment. This
as a result of Telecom Italia’s perceived lack model often is used to intervene when it is not
of investment in fibre infrastructure. It is an possible to attract any investment interest from
arrangement between a gas and electricity the private sector. The government typically
utility company, A2A, and e.Biscom, a new funds the entire network construction and the
telecommunication service provider, to accelerate infrastructure remains government-owned.
the roll-out of a large fibre-optic network in the
major metro areas. Public DBO projects work in much the same
way as public outsourcing. A private-sector
Metroweb currently owns a 3 200-km fibre contractor is awarded a contract to design and
network extending throughout much of northern build the network infrastructure on behalf of the
Italy, including the municipality of Milan, as well as government. However, the government creates
Turin and Bologna . It is a passive infrastructure a separate, publicly owned company, which then
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operator and leases point-to-point, dark-fibre manages and operates the broadband network.
service to its customers, including its separate The main difference from the public outsourcing
retail affiliate, Fastweb. Metroweb also serves model lies in the public-sector operation of the
Telecom Italia, Wind, Vodafone and other service network, rather than its construction. The publicly
providers in Milan. Funded by a EUR 100 million owned company takes full responsibility for making
loan from two Italian banks, Metroweb has the wholesale open-access network available
planned to expand to two additional metro areas to other service providers on a competitive and
chosen from a shortlist that includes Florence, open-access basis.
Parma, Verona, Brescia and Monza .
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In the public DBO model, then, the government
Although Metroweb is central to the government’s is fully responsible for financing the broadband
broadband aspirations, it has not garnered any infrastructure and therefore takes on much of the
state-aid approved funding. However, local financial risk – and the operational risks. In return,
municipalities (such as the one in Bologna) have the government retains greater control over the
played a key role in creating favourable conditions design of the network and the technical and
to attract investment in Metroweb by: service-performance criteria. Having ownership
control may allow the government to re-use assets
• creating a register of all current network from SOCs, providing they are fit for purpose. It
infrastructure in the City; and should be noted that the publicly owned company
has to meet the performance milestones itself, a
• speeding up the process of getting the job left to the private sector operator under the
necessary planning permits to carry out civil private DBO model.
work.

An Italian infrastructure fund known as F2i
acquired a 53.8 per cent stake in Metroweb in
2011, expecting a growing demand for high-

16 Trends in Telecommunication Reform 2016