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Italians Invade Germany

Telecom Italia SpA (NYSE: TI) today announced an agreement to buy a German broadband operator, Hamburg-based HanseNet Telekommunications GmbH, for €250 million (US$286 million) in cash (see Telecom Italia Buys HanseNet).

The deal is notable on a couple of counts.

First, it marks Telecom Italia's first step in a plan to become a big player in broadband in Europe -- a plan that envisions the carrier spending a further €250 million to €350 million in the next three years, possibly by acquiring other budding broadband operators.

Second, Telecom Italia is buying HanseNet from e.Biscom SpA (Milan: EBI), the parent company of FastWeb SpA, a company that's pioneering the rollout of Ethernet services to business and mass residential markets in Italy.

From e.Biscom's point of view, the sale accomplishes the reverse of what it does for Telecom Italia. Back in October 2000, e.Biscom bought 80 percent of HanseNet for 480 million Deutsche Marks ($209 million) as part of its plans to become a big player in European broadband. Now the bubble has burst, it's decided to focus on developing its business in Italy for the time being, according to Marina Gillespie, a company spokeswoman.

In acquiring HanseNet, Telecom Italia is helping e.Biscom become a stronger competitor at home. It's also adopting e.Biscom's technology, Ethernet-over-fiber, to deliver triple-play services for the first time. On its home turf, Telecom Italia hasn't taken this route; it's stuck to rolling out DSL technology over copper infrastructure, according to Gillespie. "Telecom Italia has adopted our model," she says.

Telecom Italia wasn't available for comment at press time.

Under e.Biscom ownership, HanseNet completed a 1,100km fiber backbone in the Hamburg area. It had 81,500 customers on June 30th. Revenues for the first half of the year were €47.5 million, with a positive EBITDA of €6.9 million, according to preliminary figures.

FastWeb itself has 249,000 customers in Italy. Revenues for the first half of 2003 totaled €183.1 million, with a positive EBITDA of €40.1 million, according to figures released today. Gillespie says FastWeb expects to become cash-flow positive in 2005.

FastWeb's success is encouraging operators in other countries to roll out large-scale Ethernet projects (see World Wide Packets out of the Woods).

— Peter Heywood, Founding Editor, Light Reading

benjerry 12/4/2012 | 11:42:19 PM
re: Italians Invade Germany in the broadband rollout, anybody knows?
Chutaiko 12/4/2012 | 11:37:08 PM
re: Italians Invade Germany As far as I know Hansenet is using Juniper for the BRAS (subsriber management portion) of the brioadband rollout. I think that telecom Italia is through and through Cisco. So your guess is as good as mine.

hendrikr 12/4/2012 | 11:36:50 PM
re: Italians Invade Germany "First, it marks Telecom Italia's first step in a plan to become a big player in broadband in Europe -- a plan that envisions the carrier spending a further €250 million to €350 million in the next three years, possibly by acquiring other budding broadband operators."

This is incorrect. Telecom Italia is since 2000 the 100% shareholder of BBned in The Netherlands. http://www.bbned.nl
BBned is a DSL-play and the second DSL provider in the Netherlands (behind incumbent KPN Telecom) in coverage (a reach of ca. 70% of all telephone lines). Investment in BBned and their ISP BBeyond has already mounted beyond € 100 million.
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