🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Italy begins antitrust inquiry of Telecom Italia over broadband

Published 07/04/2017, 03:01 PM
Updated 07/04/2017, 03:10 PM
© Reuters. Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan
TLIT
-
VIV
-
ENEI
-

By Agnieszka Flak

MILAN (Reuters) - Italy's antitrust authority said on Tuesday it had launched an inquiry into possible abuse by Telecom Italia (TIM) (MI:TLIT) in the rollout of ultrafast broadband in rural and sparsely populated areas.

TIM has been at loggerheads with Rome over rolling out superfast internet in so-called non-economically viable areas for weeks, after the government alleged the telecoms firm had jeopardized state tenders in the same regions.

In a statement TIM said it had acted in compliance with rules and would prove so at the appropriate time, adding it was confident its actions would turn out to be proper and correct.

The watchdog said it would look into whether TIM had tried to obstruct the process, including by changing its own investment plans in the areas and appealing against the tenders.

By slowing down the tenders "TIM could obstruct the development of infrastructure competition and the entry of new rivals", the authority said in a statement.

The watchdog is also looking into whether TIM tried to pre-emptively capture clients in those areas, using anti-competitive commercial practices, locking them into long-term contracts and applying prices alternative players are unable to match.

TIM, a former state phone monopoly, had initially said it would not invest in areas where it could not guarantee a return on its investment, forcing Rome to step in to ensure it made good on its promise to connect all Italians to superfast internet and kick-start a stagnant economy.

But in March the phone group, whose main shareholder is French media giant Vivendi (PA:VIV), said it would be investing its own money in developing a network in some of those areas, arguing the market had changed and justified the investment.

That decision came after TIM lost out in the first of the tenders to Open Fiber (OF), a broadband unit owned by power utility Enel (MI:ENEI) and state lender CDP.

The development of ultrafast internet is a top priority for the government, which last year drafted in Enel to help bridge the digital divide between Italy and the rest of Europe after claiming TIM was dragging its feet.

© Reuters. Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan

The two firms have since been embroiled in a race to roll out their networks across Italy, in a contest experts said could lead to a mutually damaging war where both lose money and infrastructure is duplicated.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.