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Fastweb Fiber Build Might be Exception to the Rule

February 11, 2013

Fastweb Fiber Build Might be Exception to the Rule

By Gary Kim
Contributing Editor

Though there aren’t too many developed national markets where a new national fiber to the cabinet network will change the industry, Italy might be the exception to the general rule. The reason is that, compared to most other Western European countries, Italy is underserved by fast Internet access services.

In January 2012, the penetration rate of fixed broadband in Italy was 22.2 percent of the population – up by 0.5 percentage points year-over-year but 5.5 percentage points below the EU average of 27.7 percent.

By June 2012, the average broadband penetration in the OECD area was estimated to be about 26 subscriptions per 100 inhabitants, OECD says.‌‌‌ Keep in mind that penetration per home depends on your assumptions about housing density in each country.

Italy, in other words, might be said to represent an “under-penetrated” market, in terms of fixed network broadband.

Italy also lags behind in the penetration growth rate with a 0.5-percent increase, compared to the EU average of 1.2 percent annually. Under such conditions, one might make the argument that building a new national fiber access network has potential.

Fastweb now says it is the only provider in Italy to offer “fiber to the cabinet” fixed-line broadband, to around two million households in Italy’s urban areas.

Fastweb generally says its network supports 100 Mbps right now, with the ability to increase speeds to 300 Mbps to 400 Mbps over the next several years.

Fastweb plans to invest some EUR 130 million in fiber expansion by the end of 2013.

And Fastweb obviously thinks its fiber network will have resonance with Italian consumers. Italy has 8.2 percent of fixed lines providing speeds of 10 Mbps and above.

There are no subscriptions with speeds greater than 30 Mbps, according to an EU analysis of broadband in Italy. Around 90 percent of broadband lines in Italy are in the range of 2 Mbps and below 10 Mbps.

Most other places, optical fiber, though a key means long term for boosting access speeds, is a somewhat difficult financial proposition.

Edited by Braden Becker
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