By Manuela Mesco

MILAN--Italy's telecommunications giant Telecom Italia (TIT.MI, TI)) and internet company Fastweb, controlled by Switzerland's Swisscom AG (SCMN.VX), have signed a memorandum of understanding to develop the fiber optic network in Italy, the companies said Friday.

The two companies will share costs and investments in infrastructure construction, but "will retain total freedom and autonomy in the development of their own network platforms, technology decisions and commerical offerings," the statement said.

On Thursday, Fastweb announced a EUR400 million investment plan to bring fiber optic technology to 20% of Italian companies and families by 2014.

Telecom Italia's Chief Operating Officer Marco Patuano commented in the statement that the incumbent's plan is to reach 100 cities by 2014.

Write to Manuela Mesco at manuela.mesco@dowjones.com

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