Italy struggles to revive lagging fibre rollout plan
MILAN :A push by Italy's government for state-backed telecoms firms Open Fiber and FiberCop to accelerate work on a European Union-funded network plan has hit a snag as the companies are struggling to agree terms of a potential deal, three sources said.
FiberCop and its smaller rival Open Fiber were entrusted with cabling more than 3 million buildings across Italy by the end of June 2026 under a 3.4 billion euro ($3.9 billion)programme aimed at rolling out ultra-fast broadband networks.
Only around half of the targeted 3.4 million buildings have been upgraded, latest government data showed, with Open Fiber, which was awarded 2.2 million buildings, lagging behind FiberCop in its work.
Italy has said it was considering handing KKR-backed FiberCop some of the work assigned to rival Open Fiber to speed up the rollout as it tries to meet the deadline agreed as part of a COVID-19 recovery plan.
FiberCop had said it was ready to take over in full the work assigned to its rival.
But government-sponsored talks between the two companies proved difficult, with FiberCop offering to take over the work at cost price by the end of this month, the sources say.
Open Fiber is pushing back on such terms, arguing it would be hard to complete a potential spin-off of its areas swiftly and agreeing a fair valuation for them would take some months, the people said.
Open Fiber's board of directors will discuss the situation at a board meeting on Tuesday but the chances of an agreement to hand FiberCop some of the areas are seen as low at this stage, the people said.
Open Fiber and FiberCop declined to comment.
Italy lags European peers in high-speed fixed-line internet coverage, with some 60 per cent of households having access to ultrafast broadband against an EU average of 79 per cent, according to EU data.
A senior official from Prime Minister Giorgia Meloni's office said it is up to the companies to take the steps needed for an agreement and that time is running short.
Open Fiber is 60 per cent owned by state lender CDP with the remainder in the hands of Australian fund Macquarie.
FiberCop was spun off last year from former state telco Telecom Italia (TIM) and sold to a KKR-led consortium, including Italy's economy ministry, under a deal worth up to 22 billion euros.
Italy's conservative government is also keen to combine Open Fiber assets with those of FiberCop to create a wholesale-only telecommunications network provider under state control.
($1 = 0.8783 euros)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
34 minutes ago
- CNA
Europe waits for ECB cut after US-driven bond rally
LONDON : European markets made a steady start on Thursday ahead of an expected ECB interest rate cut, and after weak U.S. economic numbers had triggered a sharp government bond rally and nudged Wall Street toward bull market territory. With the European Central Bank expected to deliver another quarter point cut in the euro zone's borrowing costs to 2 per cent later, investors are keen to hear what Christine Lagarde and other policymakers think might come next, given the uncertainty over a potential U.S. trade deal. German data already out showed industrial orders unexpectedly rose in April due to strong domestic demand. That helped lift Europe's STOXX 600 index for a third day running as Germany's approval of a tax relief package also lifted sentiment. The euro and regional government bonds barely budged, however, as traders waited on the ECB's move. With euro zone inflation now safely in line with the central bank's 2 per cent target, policymakers have widely telegraphed what would be their eighth cut in the current cycle later. "A cut today is pretty much a done deal," said Oxford Economics' Oliver Rakau, who expected Lagarde to sound even more non-committal than usual in the post rate-decision press conference. The combination of trade talks with the U.S. and robust data coming out of Germany increased the chance that this might even be the last cut, although for now Rakau still expects two more before the end of the year. "A sudden trade deal could shift things along a lot," he said. "They don't want to be wrongfooted and German fiscal stimulus also coming." The currency markets were largely in a holding pattern. The dollar had dropped in the previous session after weak U.S. jobs and services data, putting the focus squarely on non-farm payrolls due on Friday. The yield on the 30-year U.S. Treasury bond fell more than 7 basis points to 4.911 per cent, while the benchmark 10-year yield dropped to 4.385 per cent, having been at a 3-month high of 4.629 per cent just a couple of weeks ago. TRADE TALKS Trump's doubling of tariffs on steel and aluminium imports had also become effective on Wednesday, hitting Canada and Mexico in particular. The same day, his administration sought "best offers" from trading partners to stop other import levies taking effect in July. Japan was sending key trade negotiator Ryosei Akazawa to the U.S. on Thursday for another round of talks. Germany's chancellor, Friedrich Merz, was also in Washington to meet Trump. MSCI's broadest index of Asia-Pacific shares outside Japan had jumped 0.7 per cent overnight, with South Korea's KOSPI touching an 11-month high amid optimism around new President Lee Jae-myung and Hong Kong's Hang Seng up 1 per cent. "There is a degree of complacency in the equity markets in the sense there is an expectation now that there will continue to be resolution and deals being done," said Chris Nicol, Australia equity strategist at Morgan Stanley. "The black and white of the policy is still to be put in stone and the growth and inflation impacts are still relatively uncertain." The dollar index, which measures the greenback against a basket of currencies, rose 0.1 per cent to 98.8, trimming its 0.5 per cent slide on Wednesday. Among the individual moves the dollar was up 0.3 per cent against the yen at 143.34, 0.25 per cent higher against the Swiss franc at 0.82025 francs and virtually unchanged against the euro and sterling at just over $1.14 and $1.35 respectively. Gold pared gains from the previous day, while oil steadied after slipping on a build in U.S. inventories and as Saudi Arabia cut to its July prices for Asian crude buyers. [O/R] Spot gold edged 0.1 per cent lower to $3,374 per ounce. Brent crude ticked up 0.4 per cent to just over $65 a barrel.
CNA
2 hours ago
- CNA
South Korea's Hanwha offloads Eutelsat stake as Starlink rival seeks new investors
South Korea's Hanwha Systems said on Thursday it was selling its entire 5.4 per cent stake in Eutelsat for about 78 million euros ($85 million), as the Franco-British satellite operator seeks new investors. Eutelsat has garnered unprecedented attention this year from governments looking for home-grown alternatives to SpaceX's Starlink for satellite internet connectivity. The company is working on a new financing plan to fund the second generation of its low Earth orbit (LEO) OneWeb satellites and to fulfil commitments to the European Union's IRIS² project. It has piled up hundreds of millions of euros in losses, particularly from its waning video business, while its 2023 acquisition of OneWeb has yet to yield the results it had hoped for due to competition and delayed deployment of technology. Finance chief Christophe Caudrelier said in May that Eutelsat was looking for capital investors. Hanwha's shares were offered at 3.00 euros ($3.42) apiece, representing a 13.9 per cent discount to Eutelsat's closing price of 3.48 euros on Wednesday, a term sheet from bookrunner Citi showed. It also marks a steep 74 per cent loss on Hanwha's initial $300 million investment made in OneWeb in 2021, with the stake now valued at just $85 million. The South Korean company said the sale, which is set to be concluded on Thursday, was not driven by an investment perspective but by a strategic shift to focus more on its core business operations. "This decision reflects a long-term strategy to concentrate on defense-related satellites and military communications, rather than on civilian satellite operations and services," Hanwha said in a statement to Reuters. A representative for Hanwha resigned from Eutelsat's board in April, signalling the company's diminishing involvement with the satellite operator. MAJOR OVERHAUL When asked by Reuters, Eutelsat said none of the other shareholders had expressed interest in selling their shares. A company spokesperson declined to comment on media reports saying France may raise its stake in the group. Eutelsat is also reshuffling its upper echelons. In a surprise move last month, it appointed Jean-François Fallacher as its new CEO and it is looking for a new chairperson after the current one announced his departure in February. Eutelsat's Paris-listed shares fell as much as 16.8 per cent in early trading on Thursday. Hanwha became a shareholder in OneWeb before it merged with Eutelsat. It is also one of OneWeb's distributors in South Korea as part of an agreement signed in 2023 with the aim of securing LEO communications for the government and providing internet access to underserved areas. Last week, South Korea's Science Ministry granted licenses to Starlink and Eutelsat OneWeb to operate in the country, with services expected to be launched soon.
CNA
2 hours ago
- CNA
Pentagon chief confident NATO will commit to Trump's defence spending target
BRUSSELS: US Defense Secretary Pete Hegseth said on Thursday (Jun 5) he was confident that members of the NATO alliance would sign up to Donald Trump's demand for a major boost in defence spending, adding that it had to happen by a summit later in June. The US president has said NATO allies should boost investment in defence to 5 per cent of gross domestic product, up from the current target of 2 per cent. "To be an alliance, you got to be more than flags. You got to be formations. You got to be more than conferences," Hegseth said as he arrived at a gathering of NATO defence ministers in Brussels. "We're here to continue the work that President Trump started, which is a commitment to 5% defence spending across this alliance, which we think will happen," Hegseth said, adding: "It has to happen by the summit at The Hague later this month." Diplomats have said European allies understand that hiking defence expenditure is the price of ensuring a continued US commitment to the continent's security and that keeping the US on board means allowing Trump to be able to declare a win on his 5 per cent demand during the summit, scheduled for Jun 24 to 25. "That will be a considerable extra investment," NATO Secretary-General Mark Rutte told reporters, predicting that in the Hague summit "we will decide on a much higher spending target for all the nations in NATO". In a bid to meet Trump's 5 per cent goal, Rutte has proposed alliance members boost defence spending to 3.5 per cent of GDP and commit a further 1.5 per cent to broader security-related spending, Reuters has reported. Details of the new investment plan will likely continue to be negotiated until the eve of the NATO summit. CAPABILITY TARGETS In the meantime, Rutte said he expects allies to agree on Thursday on what he called "historic" new capability targets. The targets, which define how many troops and weapons and how much ammunition a country needs to provide to NATO, would aim to better balance defence contributions between Europe, Canada, and the United States and "make NATO a stronger, fairer and a more lethal alliance", he said in opening remarks to the meeting. Germany will need around 50,000 to 60,000 additional active troops under the new NATO targets, German Defence Minister Boris Pistorius said as he arrived at the NATO meeting. Countries remain divided over the timeline for new pledges. Rutte has proposed reaching the 5 per cent defence target by 2032 – a date that some eastern European states consider too distant but which some others see as too early, given current spending and industrial production levels. Estonian Defence Minister Hanno Pevkur said that to meet the capability targets, "we need to agree on the 5 per cent in five years. We don't have time for 10 years, we don't have time even for seven years". Sweden would also like to see NATO reach 5 per cent defence spending in 2030, Defence Minister Pal Jonson told reporters. There is an ongoing debate over how to define "defence-related" spending, which might include spending on cybersecurity and certain types of infrastructure. "The aim is to find a definition that is precise enough to cover only real security-related investments, and at the same time broad enough to allow for national specifics," said one NATO diplomat.
