Optical/IP Networks

Iliad Italia's fixed ambitions take shape with FiberCop deal

Telecom Italia (TIM) says Iliad Italia has become the latest partner to pledge support for its FiberCop vehicle, which is building a last-mile network grid in Italy and opening it up to other operators.

According to TIM, Iliad is investing in FiberCop via the "co-investment" plan outlined in February this year.

The aim of the plan is to encourage operators to participate in the construction of a secondary access network, to accelerate the rollout of fiber-to-the-home (FTTH) services across Italy. TIM said it will also offer Iliad access to the primary fiber network.

Tying the room together: The deal with Iliad is the second for TIM's FiberCop last mile network.
Tying the room together: The deal with Iliad is the second for TIM's FiberCop last mile network.

Swisscom-owned Fastweb is already participating in FiberCop following the completion of shareholder agreements with TIM and KKR Infrastructure in April.

At the time, KKR acquired a 37.5% stake and Fastweb transferred its 20% stake in FlashFiber, its joint venture with TIM (which holds an 80% stake), into FiberCop and took a 4.5% stake.

TIM is also finalizing another agreement with Tiscali, meaning that Iliad will be its third partner for the project.

Fixed focus

For Iliad, the FiberCop deal adds to its existing arrangement with state-backed broadband operator Open Fiber, and looks set to support its plan to enter the fixed services market this year.

Iliad Italia indicated in March that it aims to start offering fixed services at some point in the summer.

Rival operators will no doubt be bracing themselves for such a move. When Iliad entered the Italian mobile market with a low-cost offer in 2018, it sparked a price war that continues to this day.

Indeed, TIM, Wind Tre and Vodafone Italy have subsequently launched their own low-cost brands (Kena, Very Mobile and ho, respectively) to compete with Iliad's offer.

As of June 30 this year, Iliad Italia had over 7.8 million mobile subscribers. The mind boggles as to what mayhem the Italian upstart could provoke on the fixed market.

Furthermore, Xavier Niel, the owner of the Iliad group, recently made a €3.1 billion (US$3.7 billion) offer to buy the remaining shares in Iliad and take it private, signaling his intention of turning the group into a "leading telecommunications player in Europe" with activities in France, Italy, Poland and elsewhere.

Merger muddle

As for FiberCop, TIM's plan to merge it with Open Fiber to create a single fiber network remains up in the air. In May, reports surfaced that Italy's government will not accept a merger that leaves TIM with the controlling stake it desires.

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Around the same time, TIM CEO Luigi Gubitosi expressed some confidence about the success of the plan after Italian utility Enel agreed to sell its 50% stake in Open Fiber to state lender Cassa Depositi e Prestiti (CDP) and Australian fund Macquarie.

However, Mario Draghi, Italy's current prime minister, was said to have given the plan a thumbs-down after reports suggested that European competition authorities were horrified by plans to let TIM take control of Open Fiber.

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— Anne Morris, contributing editor, special to Light Reading

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