Concerns have emerged among EU consumer groups that plans in Italy to establish a single firm overseeing the rollout of the country’s future broadband infrastructure could lead to a ‘quasi-monopolistic’ market structure.
Italian Telecommunications firm TIM has plans to merge with rival Open Fiber in a bid to roll out a single ultrafast broadband network in the country, which has received the backing of the Italian government.
At the end of August, TIM had signed off on an agreement with Italy’s public investment bank Cassa Depositi e Prestiti (CDP), allowing for the creation of a new firm, ‘AccessCo,’ as part of the Open Fiber merger.
The move could lead to a “quasi-monopolistic access network that could be detrimental for the market, with the ultimate price to be paid by Italian consumers and businesses,” said a letter penned to the Commission by EU consumer group Euroconsumers and national affiliate Altroconsumo on Monday (12 October).
The letter also highlights fears associated with vertical integration of the merger, which would see TIM maintain a significant degree of control over the new ultra-broadband infrastructure, while at the same time being a network operator, making use of the new service.
“Particular attention should be paid to TIM’s ambition to maintain control over the merged company, since the existence of vertical links between the Single Network and a dominant retail operator would contradict the fundamental principles of competition,” the letter stated.
Moreover, TIM’s control over the new company could lead to a wider culture of telecommunications monopolisation in Europe and would set a bad example for competition in the sector, the groups said.
“The transaction at stake may create a dangerous precedent for other countries, where a return to a network monopoly could be also advocated similarly to Italy, and thus result in serious risks for European consumers in general,” the letter stated.
The new company is likely to take advantage of a purse issued as part of the EU’s Recovery and Resilience Fund, in order to accelerate the digital transition in Italy.
Wider connectivity goals
During the coronavirus lockdown period earlier in the year, Italy’s patchy broadband coverage was exposed as rural communities found themselves physically isolated from one another. The Italian government has since noted the importance of bridging its connectivity divides.
In the telecommunications world, EU objectives for mobile connectivity have also faced a series of setbacks, owing both to the coronavirus crisis as well as wider geopolitical tensions between the US and China. This has been particularly evident with regards to 5G.
As part of the EU’s 2016 5G Action Plan, nations committed to developing their next-generation telecommunications infrastructures, including the launch of 5G services in all member states in at least one major city by the end of 2020.
Moreover, in the 2018 Electronic Communications Code, the EU pledged to enhance the deployment of 5G networks by ensuring the availability of 5G radio spectrum before the end of this year.
However, a series of EU nations, are yet to formally assign any of the frequencies across the 700 MHz, 3.6 GHz, and 26 GHz bands required for 5G deployment on the bloc. These include Bulgaria, Croatia, Cyprus, Estonia, Greece, Lithuania, Malta, Poland, and Slovenia, according to data from the EU’s 5G Observatory.
For the Commission’s part, such delays are concerning, in the context of the current public health crisis and the need for greater connectivity on the bloc.
“By the end of the year, there will be a legal obligation in all member states to assign operators to 5G pioneer frequencies,” an EU official told in early October.
“So if a member state will not assign these frequencies, they will be in breach of EU law.”