The head of Italy's telecoms regulator Tuesday proposed the creation of a new company to fund the development of a nationwide high-speed broadband network.

In the regulator's annual speech to parliament, AGCOM Chairman Corrado Calabro said the new "vehicle company," which would include the main operators as industrial partners, could involve public funds, possibly provided by state lender Cassa Depositi e Prestiti.

According to the proposal, the new company would aim to replace the old copper network with a new fiber infrastructure proceeding region-by-region, like the switch to digital terrestrial in Italy's media sector.

Analysts and investors have been focusing on the potential impact of the creation of new network company on Telecom Italia SpA (TI), Italy's largest telecoms operator, which relies on its fixed-line network as a key asset.

AGCOM's proposal didn't specify if the new company would also include Telecom Italia's network among its assets.

The Italian government has already said it plans to invest EUR1.47 billion to develop broadband coverage in the country, with the aim of overcoming the existing digital divide in rural and outlying areas.

Calabro said Tuesday the government plan is complementary and not alternative to AGCOM's one, which would lead investments for a next-generation network to cover the whole country.

-By Giada Zampano, Dow Jones Newswires; +39 06 69766925; giada.zampano@dowjones.com
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