Enel to Invest $2.5 Billion in Building Fiber Network in Italy

  • Italy's largest utility sees partnership with Vodafone, Wind
  • The project may rival Telecom Italia's broadband service

Enel SpA, Italy’s largest utility, plans to invest about 2.5 billion euros ($2.8 billion) to build a fiber-optic broadband network across the country in a move that could pit it against Telecom Italia SpA.

Enel aims to cover 224 cities in phases with the broadband service, selling wholesale capacity on the network to telecommunications carriers, according to a statement from the company Wednesday. Enel said its board has discussed a partnership with Vodafone Group Plc and VimpelCom Ltd. unit Wind Telecomunicazioni SpA and is open to working with any retail carrier.

Access to Enel’s networks could make it easier for Telecom Italia’s rivals to provide faster Web access. Demand for faster Internet access is soaring as consumers increasingly use online services to watch movies, TV shows and live sporting events.

Enel will use infrastructure such as transmission towers and electricity cabinets to host fiber-optic cables, people familiar with the matter said Tuesday. Enel has about 450,000 electricity cabinets, about triple the number of Telecom Italia’s phone cabinets, according to the people. Telecom Italia is discussing a broadband agreement with another operator, Metroweb SpA, Reuters reported earlier this month.

Enel shares rose 1.1 percent to 3.95 euros in Milan at 9:38 a.m., giving the company a market value of 37.1 billion euros. Telecom Italia was down 0.8 percent at 1.04 euros, for a market value of 19.1 billion euros.

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