Enel still talking to Telecom Italia over fiber broadband plans

By Alberto Sisto

ROME (Reuters) - Italian power utility Enel is still talking to Telecom Italia over its plans to help build a national high-speed fiber-optic broadband network, Enel's chief executive said on Thursday.

"It would be great if they took part," Francesco Starace told reporters at a presentation by Italian prime minister Matteo Renzi on the government-backed plans.

Renzi, who has placed the project to connect the whole country up to ultrafast Internet services at the heart of his agenda, has enlisted the help of state-controlled Enel to lay fiber-optic cable all the way into homes and businesses using alongside its existing power network.

Enel, which earlier this year set up a new company called Enel Open Fiber, said its infrastructure would be open to all operators, but Telecom Italia has so far chosen to pursue its own plans for developing a high-speed broadband network and related investments.

French media giant Vivendi, Telecom Italia's new controlling shareholder, said earlier on Thursday it did not intend to cut jobs at the former monopoly network operator after media reports said Enel's fiber optic network plans could trigger 15,000 layoffs at Telecom Italia.

Enel said last month it intends to spend 2.5 billion euros ($2.84 billion) in taking ultrafast broadband into the homes of 224 towns across the country.

"We will select financial partners for Enel Open Fiber after the summer," Starace said.

Renzi, who praised Enel for its technological prowess, said the first broadband subscription would be made in May in the city of Perugia, one of the five cities chosen as frontrunners for the project.

Roll-out to a second batch of five cities will begin in the autumn before a second round of connections starts to another 40 cities.

"The future has arrived," Renzi said.

The first tenders to build broadband networks in the so-called economically non-viable areas, outside major towns, would start on April 29, Renzi said.

The government is waiting for approval from the European Commission on how the tenders should be executed before it goes ahead with development in these areas, sources close to the matter said.

(Additional reporting by Agnieszka Flak and Stephen Jewkes in Milan; Editing by Greg Mahlich)