The head of Italy's telecommunications regulator Tuesday urged the country's operators to work on a common project for the development of a next-generation broadband network to bridge the gap with the rest of Europe.

In the regulator's annual speech to parliament, AGCOM Chairman Corrado Calabro said two separate plans--one from Italy's largest telecoms operator Telecom Italia SpA (TI) and another from a group of its competitors--need to converge under one nationwide plan, guided by the Italian government and with clear rules set by the regulator.

Telecom Italia recently dismissed calls to join a rival broadband project and said it will push ahead with its own plans to offer 100 megabits per second broadband to 50% of the Italian population by 2018, and to invest EUR7 billion in its fixed-line network upgrade in the next three years.

In the rival plan, Fastweb SpA (FWB.MI), Vodafone Group PLC (VOD), Wind SpA and Tiscali SpA (TIS.MI) aim to invest EUR2.5 billion to bring broadband to Italy's 15 largest cities in the next five years.

AGCOM head Calabro reiterated Tuesday that the regulator and the government will have set clear rules ensuring an adequate return on investment, but also asked for a coordinated effort from telecoms operators.

"We need a common, nationwide project that avoids costly duplication on civil infrastructure and allows Italy to make the leap forward it needs," Calabro said, adding that broadband investment may be an "exit strategy" from the economic crisis.

Calabro reminded operators that the European digital agenda sets a 2020 deadline to bring an ultra-fast broadband connection to 50% of European families by 2020.

AGCOM has repeatedly pushed for more coordination between Telecom Italia and the alternative operators on a project that aims to include the country's main operators as industrial partners and could involve public funds, possibly provided by state lender Cassa Depositi e Prestiti.

Responding to the regulator's call, Telecom Italia CEO Franco Bernabe reiterated Tuesday the group is open to any project that spreads the cost of investment in fiber, while stressing that its plans are in line with EU guidelines.

AGCOM's Calabro Tuesday also urged rapid action on wireless broadband in Italy, saying the current mobile network risks collapsing due to the rising popularity of smartphones and the increase in data traffic.

Telecom Italia's CEO, however, dismissed the warning.

"There is no such risk in Italy," Bernabe said, adding that Telecom Italia, like other operators, is already addressing such concerns.

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

(Carlo Renda, with MF-Dow Jones, contributed to this report)
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