Telecom Italia reveals spending plans: €14.5bn on fibre, LTE, and some brand new datacentres

Telecom has revealed the details of its strategic plan for the next three years in Italy and Brazil.
Written by Federico Guerrini, Contributor

Telecom Italia, Italy's largest telco, last week approved its Strategic Plan for 2015 to 2017.

Over the three-year period, the company will invest around €14.5bn, approximately €10bn of which will be spent in Italy. The remainder will be go on Brazil, where Telecom Italia is one of the key players in the communications sector.

In its home market, Telecom Italia will dedicate €2.9bn to the development of its fibre broadband network, with the aim of extending it to cover 75 percent of the population by 2017.

However, only a fraction of the €2.9bn - €500m - will be used to roll out fibre to the home (FTTH) with speeds of up to 100Mbps, while the lion's share will go on fibre to the cabinet (FTTC), which delivers speeds of up to 30Mbps.

According to the company, speeding up its rollout of fibre is expected to yield an extra one million fibre broadband subscribers compared to its previous three-year plan.

Telecom Italia said it's also planning to invest €900m in developing its mobile infrastructure, in a move that's aimed at helping it to cover over 95 percent of the population with its 4G network, which would give it the most widespread LTE coverage in the country.

Of the €10bn alloted to Italy, around half will go on keeping the lights on and a further €3.8bn on mobile and fibre deployments. The remainder will go on "innovative developments", including the creation of new datacentres (€500m), the development of international fibre connections (€200m), and simplifying and upgrading its infrastructure (€500m).

The company's vision for the three years to come, as CEO Marco Patuano outlined in a conference call with analysts, is to position itself as an "enabler of the new digital lifestyle". This means focusing not only providing mobile and fibre connectivity, but also giving customers access to a number of related services, from e-government and healthcare to digital identity and electronic payment systems.

Big data analysis is another possible source of revenue for the former monopoly, which is struggling to adapt to difficult economic conditions in Italy and increasing competition from foreign rivals.

Revenues for 2014 fell 7.8 percent year on year to €21.57bn and the group's earnings before interest taxes, depreciation, and amortisation (EBITDA) dropped 7.9 percent to €8.7bn.

The company is planning to recruit around 4,000 new staff over the next four years, thanks in part to new legislation (the so-called 'Jobs Act'), which has made it easier for employers to fire newly-hired workers.

As for Brazil, Patuano has ruled out a possible deal the firm was considering with competitor Oi, owner of the biggest fixed line network in the country. The €4bn investment included in the strategic plan for Brazil will be used to extend Telecom Italia's 3G and 4G coverage in the country.

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