Enel to invest around 2.5 billion euros in broadband plan

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Italian utility Enel said on Wednesday it planned to invest around 2.5 billion euros ($2.8 billion) to help develop a national ultrafast broadband network.

The state-controlled utility said in a statement it plans to gradually roll out a fiber-to-the-home network would be open to other investors.

The development of a broadband network is a top priority of Prime Minister Matteo Renzi who aims to upgrade Italy’s phone infrastructure and support business.

Enel, which is about to start installing a new generation of smart electricity meters into 33 million Italian homes, has proposed using its pipes to run fiber into homes and offices.

Enel Open Fiber, the vehicle created to execute the utility’s project, will gradually bring ultrafast broadband to 224 Italian cities, Enel said.

Around 7.5 million homes will be covered in the first few years of the plan, it said.

Enel, which does not intend to become a telecoms operator, has plans to duplicate similar services in countries where it runs power distribution infrastructure such as in Latin America.

Italy, which lags behind other European countries covered by next-generation internet networks, has struggled to attract investors due to the large investments involved and likely to only generate small returns.

Enel, which controls Spain’s biggest utility Endesa, also said it had discussed a letter of intent with Vodafone and Wind to reach a strategic and commercial partnership to develop last-mile broadband across Italy.

It said Enel Open Fiber remained open commercially to all retail telecom operators and their client base.

Enel’s proposal has caused some friction with former phone monopoly Telecom Italia which has its own plans for connecting homes to ultrafast broadband.

Telecom Italia in its latest plan aims to spend 12 billion euros by 2018 on investments, including 3.6 billion to lay fiber optic cables.

($1 = 0.8935 euros)

(Reporting by Stephen Jewkes; editing by Jason Neely)