Italy struggles to revive lagging fibre rollout plan

By Elvira Pollina

MILAN (Reuters) -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% of households having access to ultrafast broadband against an EU average of 79%, 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% 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)

(Reporting by Elvira PollinaEditing by Keith Weir)