Fastweb Ramps Up Fibre Investment

Fastweb , the second-largest alternative broadband services provider in Italy, has announced plans to invest EUR400mn to extend its next generation fibre-optic network to 20% of the country's homes and businesses by 2016. Following on from the announcement of long-term collaboration agreements with rival retail fixed and mobile broadband operators, BMI believes that Fastweb ' s long-term expansion plan and increased investment highlight owner Swisscom 's commitment to the company as well as renewed confidence in Italy ' s premium broadband services market.

Fastweb ' s network already covers approximately 2mn premises with its fibre-to-the-home ( FTTH) network and served 1.673 mn ADSL and fibre subscribers at the end of June 2012. The company plans to invest EUR130mn in extending its fibre-optic networks to street cabinets - fibre-to-the-cabinet/fibre-to-the-street (FTTC/FTTS) - by 2013 and, th r ough its partnerships with Milan-based fibre operator Metroweb , mobile operator Vodafone and alternative fixed-line operator Wind Telecomunicazioni , will be investing a total of EUR400mn to provide very high - speed broadband services to 20% of homes by 2016.

Italy FTTH Market Versus Regional Peers
Countries >200,000 FTTH/Subscribers

FTTS is a new hybrid technology that allows fibre-optic cables to be laid closer to homes while also augmenting the capacity of copper-based last mile accesses. Data transfer rates of up to 100Mbps can be achieved using FTTS and, with pending technological innovations set to further improve optical transmission rates, rates of up to 400Mbps could be available in just a few years, without necessitating the replacement of existing cables.

As part of its long-term plans to close the digital divide, the Italian government has been supporting telecoms operators ' efforts to lay fibre between and within the country ' s largest business and population centres. Financial support has been provided to Metroweb, for example, and the company has outlined ambitious plans to connect 30 cities with fibre in the medium term. Connecting the alternative operators ' disparate fibre networks will help raise broadband speeds and quality of service, while the sharing of infrastructure will help reduce operating expenses and enable service providers to lower subscription rates for end-users. Broadband video services are expected to be most appealing to Italian consumers as terrestrial TV services are relatively limited in terms of breadth of content, cable TV is practically non-existent and premium on-demand content is only patchily available, with incumbent Telecom Italia successfully leveraging its core fibre network to provide its Cubovisi on IPTV service. There were 224,000 Cubovision subscribers as of June 2012.

Citing data from IDATE, the FTTH Council Europe believes Italy is currently the sixth-largest EU39 market for FTTH/FTTB, with around 370,000 subscribers at the end of 2011. Leading the market is Russia, with more than 4.5mn subscribers, though the larger size of the overall Russian market means that penetration rates are comparatively low. Portugal and Turkey grew fastest in terms of FTTH subscriber additions in 2011, in contrast to relatively flat growth in Italy. Heavy Reading forecasts, also cited by the FTTH Council, suggest that Italian FTTH subscribers will number fewer than 1mn by 2016, meaning FTTH penetration will be very low. Therefore, assuming that Swisscom/Fastweb can maintain planned investment and build-out rates, this gloomy forecast can be averted.

This article is tagged to:
Sector: Telecommunications
Geography: Italy, Italy, Portugal, Russia, Turkey, Italy, Italy, Italy, Italy, Italy, Italy, Italy, Italy

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