Telecom Italia (TIM) has described the business model of Open Fiber a "failure" during a meeting with investors, prompting a strongly-worded reply from the wholesale-only company, Reuters reports. Replying to questions from minority investors association Asati ahead of a shareholder meeting later this week, TIM's CEO Luigi Gubitosi said that any single broadband network should be controlled by a vertically integrated player since wholesale-only models had been a failure wherever they had been tried.
In a statement subsequently issued by Open Fiber, the company said the new European Electronic Communications Code as well as Italy’s communications and antitrust regulators have all described wholesale-only ventures as the best models for encouraging the huge investments needed to create high-capacity access networks. “Investments which, in contrast, have not been made by the vertically-integrated operator, prompting the delay our country now finds itself in.”
Open Fiber added that it has become the third-largest supplier of FTTH connectivity in Europe (behind Telefonica and Orange) over the past 3 years after connecting some 8.5 million premises to its network, a result that is “far from a failure, judging by the uncompetitive methods used by the incumbent to obstruct it and the renewed interest shown in taking control of it.”
The latest war of words between the rivals comes after Open Fiber CEO Elisabetta Ripa confirmed that the company would be taking legal action against Telecom Italia (TIM) following last month’s fine by Italy’s competition watchdog for abusing its dominant position in the broadband market. The companies have been officially discussing ways of integrating their respective fibre-optic networks since last June with a view to avoiding unnecessary duplication of cables but talks reportedly stalled earlier this year due to regulatory, funding and business issues, above all TIM’s insistence on keeping control of any future venture.
