Open Fiber will receive a very welcome cash injection of €500 million as it continues its fibre rollout across Italy.
The pressure has been building on TIM over the last few months, as government agencies and consumers alike continue to become frustrated with the state-of-play with national infrastructure, but Open Fiber is proving to be a suitable competitor. It’s a disruption which the stagnant market probably needed, but Open Fiber can now boast of a €500 million war chest to continue to build out modern networks required for the digital economy.
“The result we announce today is a confirmation of the solidity and sustainability of our business plan, around which investors are increasingly attracting interest,” said Tommaso Pompei, CEO of Open Fiber. “Open Fiber is now booming, thanks to a significant growth program also for its significant direct and indirect socio-economic impacts.”
The whole-sale only player has now confirmed the €500 million, 15-month bridge loan with BNP Paribas, UniCredit and SocGen, which will support its FTTH ambitions. The loan itself is part of a wider €3.5 billion project financing deal, which has been described as ‘one of the most important operations of this kind in Europe’.
Following the cash-injection, Open Fiber will charge forward with its 2017-2026 industrial plan to take Italy into the connected economy. The plan will see 271 ‘Cluster A and B’ cities wired, as well as the 6,753 municipalities included in what is today described as the white areas, or ‘Cluster C and D’, essentially the rural areas which are currently under-served. The big picture of the business is to invest more than €6.5 billion in infrastructure to bridge the digital divide across the country.
It certainly is good news for the market challenger, and would seem to have buoyed the confidence of the management team. Speaking to La Stampa daily (courtesy of Reuters), Open Fiber Chairman Franco Bassanini told the newspaper it is in a good position to buy the copper network of TIM, should the assets be put up for sale.
Both companies are racing to produce the ultrafast networks which the digital economy is demanding, but it would appear momentum is on the side of Open Fiber for the moment.