Vodafone, Wind sign letter of intent for Italy fiber-optic network

Reuters News
Posted: May 29, 2015 12:50 PM

MILAN (Reuters) - Britain's Vodafone and Vimpelcom's Italian mobile phone unit Wind have signed a letter of intent with shareholders of broadband firm Metroweb to build a fiber-optic network in Italy, the companies said in a joint statement.

The agreement comes as Italian Prime Minister Matteo Renzi is pushing to upgrade the country's aging phone infrastructure in a 12-billion-euro ($13 billion) plan he considers vital to modernize the economy.

Rome sees Metroweb, which is partly owned by the state and has attracted takeover interest from former phone monopoly Telecom Italia, as a building block for the multi-billion-euro plan.

In the statement on Friday the companies said the project was open to other operators and investors ready to pursue the goals set by the government. A decree detailing the broadband plan is expected in the coming days.

Telecom Italia had proposed a gradual take-over of Metroweb. But its proposal was rejected by the company's state owners who favor opening up the capital of Metroweb to all operators.

If the letter of intent leads to a deal, this would put pressure on Telecom Italia, which is going ahead with its own investment plan to upgrade its copper network and bring faster Internet connections to Italian consumers.

The statement on Friday did not mention any timeframe for any agreement nor the size of the possible joint investment.

(Reporting by Danilo Masoni; Editing by Pravin Char)