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Vodafone CEO slams Italy's single fiber network plans

Nick Read, the CEO of Vodafone Group, said a return to a monopoly in Italy, as threatened by the government's move toward the creation of a single fiber network controlled by former incumbent Telecom Italia, would be a "giant step backward" in a market where creating any form of fixed-line competition "has been notoriously difficult."

In an opinion piece published by Politico, Read noted that only with the establishment of Open Fiber a few years ago did Italy start to modernize its fixed networks.

"So, reverting to a failed monopoly model cannot possibly be good for either competition or investment. It also contravenes four decades of anti-monopolistic policy and EU law," he said.

Read's comments come just over a week after Telecom Italia's plan to create a single fiber network in Italy through an integration with Open Fiber finally gained traction. The aim is to create a new company called AccessCo, which will integrate Telecom Italia's new FiberCop unit with Open Fiber.

Under the terms of the agreement, Telecom Italia will own at least 50.1% of AccessCo, which will incorporate its secondary and primary networks as well as Open Fiber.

State of independence?
Telecom Italia, as well as OpenFiber shareholder and state lender Cassa Depositi e Prestiti (CDP), have been at pains to stress that the "independence and third-party status" of the new company will be guaranteed by a shared governance mechanism with CPD Equity. CPD said AccessCo would be open to other investors.

Indeed, other companies are already said to have expressed interest in investing in the single network, including state broadcaster RAI and commercial broadcaster Mediaset.

Sky Italia, Vodafone Italy and Wind Tre have all formed wholesale access deals with Open Fiber and are keen to ensure that the creation of a single national network "guarantees a competitive, transparent and neutral market."

However, Read appears unimpressed by declarations of independence made thus far and has called on the European Commission to "more forcefully defend its prerogative" against such a "blatant" attempt to "deviate from EU law."

The Vodafone CEO said the creation of AccessCo "would leave would-be fixed broadband providers with only one seller of wholesale access to the combined network — yet again Telecom Italia. Open Fiber's wholesale customers, including Vodafone, would have to compete against Telecom Italia's retail fixed broadband offerings without any other option than to buy wholesale access from them."

Ushering in new entrants: also a problem
Read also took issue with efforts by the Czech Republic and Portugal to "artificially" push new players into the market "at the sacrifice of long-established players who have invested significantly to deliver high-quality digital infrastructure."

Czech regulator CTU recently announced the start of its delayed 5G auction, inviting bids for frequencies in the 700MHz and 3.4GH-3.6GHz bands. It has also reserved 2x10MHz in the 700MHz band for a potential fourth entrant, which would compete with O2 Czech Republic, T-Mobile Czech Republic and Vodafone Czech Republic.

In Portugal, regulator ANACOM plans to auction frequencies in the 700MHz, 900MHz, 1800MHz, 2.1GHz, 2.6GHz and 3.6GHz bands in October 2020 and is also considering reserving spectrum for a fourth entrant. At present, Vodafone Portugal competes against Altice Portugal-owned MEO and NOS.

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— Anne Morris, contributing editor, Light Reading

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