Incumbent presses ahead with network deployment despite development minister warning it could damage public interest.

Telecom Italia is pushing ahead with plans to deploy ultrafast broadband in rural areas, setting it on course for a potential showdown with the government.

Italy’s undersecretary of state for development, Antonello Giacomelli, said in a La Repubblica report on Saturday that the incumbent’s rollout plan risks damaging the government’s own rural broadband plan, and by extension, the public interest.

"There is no ban on private investment during the public intervention period," replied Telecom Italia CEO Flavio Cattaneo, in a separate La Repubblica report on Sunday.

The conflict stems from an overlap that has arisen between the government and Telecom Italia, known as TIM, regarding ultrafast wholesale broadband network deployment in unprofitable, so-called ‘white’, areas of the country.

The government launched tenders in a bid to subsidise rollouts in white areas, which were identified via a consultation in which TIM was a participant.

TIM signed up to the first of three planned tenders, but later withdrew, opting instead to ramp up investment in its own networks. The first tender, worth €1.4 billion, was eventually won by Open Fiber, a subsidiary of public electricity provider Enel and state-owned lender Cassa Depositi e Prestiti (CDP). Sources cited by Reuters late last week claimed that Open Fiber has also won the second tender, with a bid of €800 million.

TIM’s ambitions make life tricky for the government, because it undermines the case for spending public money on broadband infrastructure – there is no need for it to intervene in the market if the private sector is already investing.

It is therefore aggrieved that TIM initially said it could not justify ultrafast network deployment in the identified white areas, but appears to have since changed course.

"It is clear that if TIM changed its mind, it would risk causing damage to the public interest," Giacomelli said in Saturday’s La Repubblica report. "The government should evaluate the extent and actions necessary to protect the community."

Cattaneo said there are no rules preventing companies like his from reviewing their investment strategy.

"We are a private company and in Italy, there is freedom of enterprise," he said, in Sunday’s La Repubblica report.