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The fixed-line telecommunications market has continued to see a decline in access and voice revenues, while broadband and ultra-broadband revenues have shown continuous growth. In recent years, service providers have concentrated mainly on expanding the penetration of broadband and ultra-broadband services and defending Voice revenues by introducing bundled voice, broadband and service deals in a highly competitive environment with consequent pricing pressure.
Deals and offers are also becoming more competitive thanks to the consolidation, among competitors, of an approach based on control over infrastructure (above all, Local Loop Unbundling (LLU), as well as Fiber to the Cabinet (FTTC) networks). The main fixed-line service providers are also offering mobile services, also as Mobile Virtual Operators (MVOs).
As concerns competition in infrastructure, two providers – Open Fiber (an ENEL Group company) and Infratel (controlled by the Ministry of Economic Development) – presented plans for the development of their own optic fiber networks as alternatives to the TIM network, which respectively target major Italian cities and areas of market failure.
For major cities, Open Fiber announced a plan to invest 3.9 billion euros in the development of Fiber to the Home (FTTH) in 271 large Italian towns by 2022, reaching around 9.6 million real estate units.
- The service is already available in some districts of major cities, such as Milan, Turin and Bologna, where Metroweb (which was acquired in December 2016) had previously expanded its network, but also in other cities such as Bari, Cagliari, Catania, Naples, Padua, Perugia, Venice, Genoa, Palermo and others.
-  Open Fiber announced that it would be extending the network to another 40 towns by the end of 2017, with another 40 to be added in 2018.
In the meantime, according to media reports, a number of our competitors in the TLC retail market have signed an agreement with Open Fiber to link their new ultra-broadband customers onto its network, where available.
As concerns areas of market failure – the so-called “white areas” in the C and D clusters of the government’s Ultra-Broadband Plan – Infratel held two public calls for tenders over 2016 and 2017 for the development of a UBB network to deliver services to a total of 9.3 million real estate units in over 6,000 municipalities across 16 regions.
- In the first call for tenders, Open Fiber won all five of the lots offered in the six regions involved (Lombardy, Emilia Romagna, Veneto, Tuscany, Abruzzo and Molise), covering around 3,000 municipalities and 4.6 million real estate units.
- In the second call for tenders, Open Fiber won all six of the lots offered in the ten regions involved (Piedmont, Valle d'Aosta, Liguria, Friuli Venezia Giulia, the Autonomous Province of Trento, Marche, Umbria, Lazio, Campania, Basilicata and Sicily), covering around 3,700 municipalities and 4.7 million real estate units.
- Infratel is now preparing a third call for tenders for the remaining areas in Calabria, Apulia and Sardinia (the public consultation process was brought to a close on November 20, 2017).
As such, Open Fiber’s development plan and the coverage of the public contracts awarded by Infratel stepped up competition in the infrastructure sector in a major way, by introducing new ultra-broadband networks that overlap and have a different reach to existing infrastructure:

– areas with two FTTH networks overlapping FTTC networks

– areas with a single FTTH network overlapping FTTC networks

– areas with FTTH networks overlapping ADSL networks

– areas with FTTC networks overlapping ADSL networks

Competition in the Italian fixed-line telecommunications market is also characterized by the presence of other service providers besides TIM, such as Wind-Infostrada, Fastweb, Vodafone, and Tiscali, which have business models focused on different segments of the market.
After years of market decline, driven by the migration of fixed-line customers to mobile services and alternative telecommunications solutions (Voice over IP, e-mail, Social Media chat services), fixed-line accesses grew slightly in 2017, reaching approximately 20.6 million at December 31, 2017 (including Infrastructured OLO accesses and FWA-Fixed Wireless Access). Competition in the access market led to a gradual reduction in TIM's market share.

As concerns the Broadband market, at December 31, 2017, the number of fixed-line broadband customers in Italy (including both broadband and ultra-broadband customers) was estimated to have reached a penetration rate of approximately 80% of all fixed-line accesses. The spread of broadband continues to be driven by the penetration of computers and other enabling devices (such as Smart TVs), but also by growing demand for fast connections and access to new over-IP services that are becoming increasingly widespread (Media & Entertainment, IT and Digital services).