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11/12/2016

Italy approves €6bn plan to boost broadband networks

Digital

Italy approves €6bn plan to boost broadband networks

Fiber network server

[Shutterstock]

The Italian government approved a plan on Tuesday (3 March) to bring its high-speed broadband network into line with European Union targets, but it held back from forcing operators to replace their copper wire networks with fibre optic cable.

Italy faces growing pressure to strengthen its telecommunications infrastructure and digital sector to help improve the performance of an economy that has been in virtual stagnation for two decades.

“We are creating a plan to give our country the digital infrastructure, the digital highways like any other European country,” Industry Minister Federica Guidi told reporters.

The European Commission ranks Italy near the bottom of the 28-member EU in terms of digital economy and online services. A recent report showed that almost a third of the population, 31%, had never used the Internet.

Although basic fixed broadband is available almost everywhere, only 51% of households are subscribers – the lowest level in the EU – and only 21% of households have access to faster, next-generation networks.

The EU’s digital agenda calls for member states to ensure by 2020 that all households have access to internet lines with download speeds above 30 megabits per second and half have access to super-fast 100-megabit connections.

The Italian government has pledged 6 billion euros to build up the networks, which it hopes to boost with private investment from telecoms operators. Guidi said if all worked well, 100-megabit coverage could reach up to 85% of households by 2020.

Copper vs. fibre optic

While all sides acknowledge the need to upgrade Italy’s aging copper wire internet infrastructure, the cost of installing a new fibre optic network over a short period has alarmed the telecoms companies.

The government favoured modernising the whole network with fibre optic cable directly into subscribers’ homes (so-called fibre-to-the-home, or FTTH).

But operators argue that immediate conversion would be too costly. They prefer boosting the capacity of existing copper wire connections that run between street cabinets and households (so-called fibre-to-the cabinet or FTTC).

Speculation that the government may order the former monopolist Telecom Italia to switch off its copper network entirely over the next few years caused some alarm in the sector, but Guidi said companies would be left to decide the most appropriate technological solution.

“The choice has been to leave the market, the operators to decide on the most efficient technology,” Industry Minister Guidi told reporters.

Vodafone Italia chief Aldo Biso told La Repubblica newspaper Tuesday that the country urgently needed to modernise its network. He said Italy was ranked 51st in average broadband connection speed at 5.5 megabits per second, while Romania, for example, was ranked 16th with 11.3 megabits per second.

“This is the first government that has the courage to set its ambitions so high,” Biso said.

Background

As the Internet becomes an essential service for everyday activities such as shopping, banking and entertainment, those with low-speed connections or no connections at all risk being left behind.

To counter this new form of inequality, the European Commission in March 2014 proposed making it easier and cheaper to deploy new networks.

>> Read: EU moves to speed up fibre networks

Works to dig new lines and connect them to homes can be highly costly however. Returns push operators to invest, but not in areas with a low population density where costs are likely to exceed gains.

As a consequence, many European regions are left without proper coverage.

Standard broadband covered 96.1% of total EU households in 2013, but the percentage goes down to 83.2% for rural homes, according to the European Commission.

Moreover, standard connections are usually low-speed. Only 14.8% of European fixed broadband lines provide a headline download speed of at least 30 Megabyte per second (Mbps), which is the minimum required to access certain services online, such as streaming. Some of them go as low as 2 Mbps.

Often, the headline speed is not even provided. The average speed is 75% lower than promised, says the European Commission. In the UK and in France the actual speed "can be as low as 45% of advertised speed,” according to the EU executive.

Optical fibre networks, also known as Next Generation Access networks (NGA), are instead able to provide Internet at a speed of at least 30 Mbps.

NGAs already connect over half of EU households, which is still far behind the official target of having all citizens covered by high-speed Internet of at least 30 Mbps by 2020.