Enel set to secure Italian fibre broadband deal with Vodafone, Wind

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By Alberto Sisto

ROME, March 16 (Reuters) - Italian power utility Enel (Swiss: ENEL.SW - news) is set to reach an agreement with mobile network operators Vodafone and Vimpelcom (NasdaqGS: VIP - news) 's Wind over its plans to help develop a national fibre-optic broadband network, Chief Executive Francesco Starace said on Wednesday.

Since Prime minister Matteo Renzi made the development of a nationwide fibre network a government priority Enel (LSE: 0NRE.L - news) has offered to use its domestic power network to run fibre all the way into homes and offices.

State-controlled Enel is about to start installing a new generation of smart electricity meters into 33 million Italian homes and has proposed laying fibre in its pipes at the same time.

However, the proposal has caused some friction with Telecom Italia which has its own plans for connecting the country's homes up to ultrafast broadband.

Starace told parliament's industry committee on Wednesday that Enel's proposal would cost 30-40 percent less than building a new fibre network from scratch.

"On March 22 I will propose to the board an agreement with Vodafone and Wind regarding 250 cities," he said.

Vodafone and Wind would be commercial partners paying a rental fee to use the cables rather than be shareholders in Enel Open Fibre, the vehicle created to manage the project, he said.

Starace said the vehicle would be open to other operators, adding talks with Telecom Italia (Other OTC: TIAJF - news) and Swisscom (LSE: 0QKI.L - news) 's local broadband subsidiary Fastweb were continuing while small Italian broadband firm Metroweb was also interested.

Shareholders in Enel Open Fibre would be primarily financial and would not be more than two, he said.

"The objective is to create, manage and maintain fibre infrastructure ... both in (profitable) areas and the disadvantaged ones," he said.

Enel has plans to duplicate similar services in countries where Enel operates power distribution infrastructure such as in Latin America, Spain and Romania.

Telecom Italia is separately talking with Metroweb over bringing fibre-to-the-home to 250 Italian cities and the two companies have submitted a joint proposal to the regulator for approval.

Meanhile Wind Telecommunicazioni is currently trying to get approval from the EU's competition regulators to merge with CK Hutchison (HKSE: 0013-OL.HK - news) 's 3 Italia, the smallest of Italy's four mobile network operators.

(Writing by Agnieszka Flak and Stephen Jewkes; Editing by Greg Mahlich)