Metroweb Plans Fiber Rollout, Fastweb to Acquire Stake, CEO Says

Metroweb SpA, the owner of Milan’s largest fiber-optic network, plans to roll out fiber in Italian cities with a focus on the north of the country where demand for broadband is “more significant” and may make acquisitions.

The business plan will probably be ready within two to three months, Chief Executive Officer Alberto Trondoli said in an interview in Milan. “We will get financing from private parties, banks and institutions as cabling costs are on average between 800 euros ($1,105) to 1,000 euros per household,” he said. Metroweb may acquire existing fiber networks held by local utilities to build size and speed the rollout.

Customers using Metroweb’s network include Telecom Italia SpA (TIT), Fastweb SpA (FWB), Vodafone Group Plc (VOD) and Wind Telecomunicazioni SpA. Fastweb, controlled by Swisscom AG (SCMN), will acquire a stake of about 10 percent in Metroweb, probably at the beginning of 2012, Trondoli said. Fastweb is Metroweb’s biggest client, representing about 70 percent of its business, followed by Telecom Italia, according to the CEO.

“Metroweb should be the company that brings fiber to the home in the most important parts of the country,” the CEO said. “We have a very successful business model that has been proven in Milan over the last few years and the new shareholders announced their willingness to replicate it in other urban and metropolitan areas of Italy.” It will take “three, four years to carry out” the planned rollout, Trondoli said.

Intesa Sanpaolo SpA (ISP)’s IMI Investimenti unit and infrastructure fund F2i SpA in May agreed to buy Metroweb from London-based private-equity firm Stirling Square Capital Partners and A2A SpA (A2A) in a deal valuing it at 436 million euros.

Revenue Forecast

A2A, Milan’s municipal utility, owns about 19 percent of Metroweb after converting a bond loan this month. It will have about 25 percent once the merger between Metroweb and the acquisition vehicle of F2i and Intesa Sanpaolo is completed. Trondoli and other senior managers own about 2 percent of Metroweb.

Metroweb, whose network is the biggest in the northern Italian city and the surrounding region of Lombardy, has more than 7,200 kilometers (4,474 miles) of cables in an area with potential users in 800,000 households.

“Our mission is to carry out the rollout of the fiber network and make it available to all phone operators,” Trondoli said. The operators may use Metroweb’s network to provide fast broadband services to their own customers.

Metroweb expects revenue to rise to more than 55 million euros this year and earnings before interest, taxes, depreciation and amortization to advance to about 44.5 million euros, he said.

“Digitalizing urban and industrial areas where there is demand for ultra-fast broadband is a reasonable plan,” said Emanuele Vizzini, chief investment officer at Investitori Sgr in Milan. “This will also take off some pressure from Telecom Italia to play the big-investor role.”

Franco Bassanini, chairman of state-lender Cassa Depositi e Prestiti SpA, was also named chairman of Metroweb this month.

To contact the reporter on this story: Chiara Remondini in Milan at cremondini@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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