The accounts of Open Fiber
Open Fiber, the competitor network company of Telecom Italia led by Mario Rossetti, has communicated the 2022 balance sheet data. The group achieved as of December 31 with the ultra broadband network coverage of 15.5 million real estate units (of which 13 million in FTTH and 2.5 million in FWA). Revenues, although growing, are still low: around 470 million euros, up (+24%) compared to around 380 million at the end of 2021.
Read also: Tim, the bidding puzzle and the troubles of the National Strategic Pole
The gross margin grew by 18%, from approximately 152 million euros in 2021 to approximately 179 million, with a margin that stood at 38%, despite discounting the costs for participating in the tender for the PNRR and the start of the construction activities in the 8 lots awarded as part of the Italy 1 Giga Plan in 3,881 municipalities. The net result records a loss of 162 million euros (approximately -210 million in 2021). The net financial position amounts to -4.6 billion euro, of which approximately 660 million in shareholder loans, while investments made in the reference year are over 1.5 billion euro.
supported investments
Significant investments: 6.2 billion euros already used on a total plan of over 15 billion. The development of the network, according to the company’s press release, saw a marked acceleration in 2022, in particular in the White Areas where the greatest efforts were concentrated: with approximately 20 thousand incremental kilometers of network built compared to 31 December 2021, the more than 50% of what has been done since the beginning of the plan, for a total of over 57,000 of the approximately 88,000 km overall of the project.
The marketing of the services is open in 238 large and medium-sized cities (Black Areas) and in about 4,700 small municipalities (White Areas, where OF operates as a public concessionaire), of which about 3,300 are in FTTH. In short, huge investments for now when compared to the slender revenues. What is true is that 2since Open Fiber entered the marketin 2017, Italy reversed the trend that had pushed it to the bottom of the European digital rankings after years of low investments.
The positive result
Evidence of the positive result are the official documents of the European Union and Agcom and the reports produced by the FTTH Council. So now Italy’s FTTH coverage has increased from 34% to 44%, close to the EU average (50%). At the end of 2022, there were 2.3 million active customers on the Open Fiber network. The company, 60% controlled by CDP and 40% by the Australian infrastructure fund Macquire, it was strongly desired by Matteo Renzi’s government for the reasons mentioned above. The problem is that the investments for the construction of the network are, as we have seen, very important and therefore the presence of two infrastructural networks is becoming difficult.
The solution would be to merge Open Fiber into Telecom after having resolved the issue of the spin-off of its fixed network. But even this question appears difficult due to the Antitrust limits set by the EU which could impose some remedies such as the sale of some network “tracts” of the two companies which overlap in the black and gray areas. In this case there would be no shortage of buyers, first of all Fastweb which could boost your network. The dilemma is that Telecom and Open Fiber together would find themselves facing a new competitor in the access network. A bit like what happened when there was a merger between Tre and Wind and Iliad arrived in Italy, which with its policy of low prices and many gigs, wreaked havoc on the mobile telephony market.