Not just Tim, here are the effects of Butti’s plan on fiber
What the Undersecretary for Innovation Alessio Butti said about the need to deregulate fiber in Italy and beyond
Even in our country, fiber needs to be deregulated, as is already happening in the rest of Europe.
This is what the undersecretary of the Prime Minister with responsibility for Technological Innovation, Alessio Butti, claims in a speech published today in Il Sole 24 Ore .
“Italy is the only European country that still maintains intervention criteria for fiber that were designed to be applied to copper networks. I am referring to the cost orientation criteria of the wholesale access price to the new networks. This model, as is known, does not attract investments and reduces the competitiveness of the sector" explained Butti: "A company that can achieve margins only in measures and criteria defined by the regulator – observed the Undersecretary for Innovation – will hardly be able to give efficient responses to market needs, particularly in this phase of long-term choices, which require costly investments to face and which aggravate the risk on returns". Today, fiber is necessary not only for fixed connections for homes and businesses, but also to ensure the connectivity of 5G networks.
This is why "I believe the time has come to align Italy with the rest of Europe, changing the regulatory approach to finally give a clear signal to the operators of our country who invest with private funds in fibre" the undersecretary pointed out to Innovation.
All the details on Butti's plan for fiber and the consequences on the Italian TLC operators Tim and Open Fiber, the latter the company founded in 2015 that won the public tenders to bring FTTH optical fiber to the "white areas", due to market failure .
BUTTI'S MOST RELEVANT THESES ON FIBER
Therefore, the Meloni government representative in charge of Innovation hopes for a deregulatory approach for fiber in Italy.
Furthermore, in the Confindustria newspaper, Butti recalls that "The European Commission, in the course of the initiatives adopted for "Gigabit connectivity" has recognized the need to orient the sector framework towards regulation that is more attentive to the need to promote investments for networks at high speed like fiber to the home".
“The entire sector finds itself in a moment of strong discontinuity compared to the past” observed the undersecretary. “It is no coincidence that the European Commission's invitation to support a deregulatory approach to fiber was accepted by national regulators, whose action in this sense was remodulated to take into account the fact that the access obligations would be applied on networks still to be achieved" undersecretary Butti pointed out.
FOLLOW THE EXAMPLE OF SPAIN, FRANCE, GERMANY AND UK
To this end, Butti looks to the example of other EU countries such as Spain, which "already in 2015 opted to largely deregulate access to fibre. France eliminated price controls on fiber, which Germany also did. Finally, the United Kingdom has provided for regulation of copper and broadband, but only up to 40 Mbit, while higher speeds are deregulated in line with the European model, despite leaving the Union".
“These national models therefore all recognize a differentiation of obligations between copper and fibre, because in market sectors that require access to huge financial resources it is now necessary to have a “level playing field” on the European market and shared conditions capable of attract new resources and ensure their return on investments" explained the Undersecretary for Innovation.
According to Alessio Butti "Greater private investments will, in fact, make it possible to contain the use of public money, reducing coverage times and creating more innovation in a sector which, as is known, constitutes the driving force of the entire economic system".
THE CONSEQUENCES FOR TIM AND OPEN FIBER
Therefore our country needs a new approach, "since it will soon have the two largest investors in the latest generation fiber networks with the qualification of wholesale-only operator and, therefore, without retail functions" highlighted Undersecretary Butti.
On the one hand there will still be Open Fiber (wholesale-only operator) and on the other, with the corporate separation of Tim, there will be the creation of a wholesale-only operator (no longer controlled by the former Telecom Italia). “This requirement allows the European legislator to consider fiber operators free from cost orientation obligations on the price of access to new networks” explained Butti.
THE CHANGE AT THE TOP FOR THE FIBER OPTIC COMPANY
Meanwhile, fiber optic company Open Fiber has experienced a change at the top.
At the end of September, the CDP shareholders and the Macquarie fund – upon input and approval from the government and the Ministry of Economy – gave the green light to the early replacement of Mario Rossetti at the head of the company with Giuseppe Gola, former CEO of Acea and former CFO of Wind. For some time now, the company – and therefore the actions of former CEO Rossetti – have been affected by the delays accumulated in the white areas. “Delays will be partially recovered if the works are actually completed, as per the timetable, in 2024” underlined Il Sole 24 Ore.
COMMENT BY DARIO DENNI, FOUNDER OF EUROPIO CONSULTING
“Undersecretary Butti is right to ask for the deregulation of access to the new fiber networks but to do so we must go through a market analysis conducted by Agcom”, Dario Denni, founder of Europio Consulting, tells Startmag . Butti's speech on the Sole 24 Ore .
“We cannot look at innovation – continues Denni – with the rearview mirror but we are sure of one thing, that many geographic markets are already deregulated. Milan opened the scene for the geographical segmentation of remedies a few years ago. Infrastructural evolution has given rise to a concentration of excellence in the main cities, leaving many disadvantaged areas still uncovered. Here it is: in an evolutionary scenario it is right that stringent rules remain only for networks subsidized with state aid, also for obvious competitive reasons. But the rest is entrusted to the market."
ENSURE THE PRESENCE OF THE STATE IN THE NETWORK
In the meantime, in the background there is still the issue of the separation of the TIM network. The sale operation to the KKR fund, with the Italian executive ready to invest up to 2.5 billion euros to secure a 20% stake in the new NetCo, together with the F2i fund, has a total value of approximately 23 billion EUR.
Speaking this morning at ComoLake 2023-Next Generation Innovations, Undersecretary Butti reiterated the importance for the government of "being able to control the telecommunications network, guaranteeing a presence on the part of the State with regards to control and then starting to glimpse the use of new technologies". For the undersecretary, separating the network from services "facilitates a pan-European market and the creation of pan-European operators". According to Butti, this operation "will make it possible to overcome the dated commercial policy which does not allow us to guarantee a necessary technological evolution". “Since it is a company listed on the stock exchange, I do not express opinions. The important thing that the government is interested in is being able to control the telecommunications network, guaranteeing a presence on the part of the State as regards control and then starting to glimpse the use of new technologies" commented Alessio Butti.
Finally, according to Butti "to ensure European digital sovereignty it is necessary to create a true digital market, where telecommunications services are effectively available to all citizens, without barriers and obstacles. In this way it will also be possible to have the consolidation desired by European operators on the American model and, therefore, compete on an equal footing with other large areas of the world".
LABRIOLA: NEW RULES NEEDED
For his part, Tim's number one, Pietro Labriola, stated that the separation of the network "makes noise only because we are considered an incumbent".
“Many” see this operation “as something new compared to the past and it is because we are used to the logic and stereotypes” of the past. “But what Tim is trying to do is no different than what Wind does. In our case it makes noise because we are considered an incumbent,' added Labriola, also speaking at ComoLake 2023-Next Generation Innovations.
In the telecommunications sector "new rules are needed" regarding the return on investments. “And we need to do it quickly” urged Tim's CEO. In detail, the top manager underlined the need to have the same rules for everyone, including the OTTs; and warns that if it doesn't happen, "in two years we risk no longer being there because others who don't have the same rules as us have a competitive advantage. If there is regulation it must apply to everyone, otherwise this industry risks no longer existing,” he concluded.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/non-solo-tim-ecco-gli-effetti-del-piano-di-butti-sulla-fibra/ on Thu, 05 Oct 2023 14:19:01 +0000.