Broadband

Expanding the reach of digital technologies is a strong multiplier in terms of growth, making it a true enabling factor for the growth of a country. The World Bank estimates that a 10 percentage-point increase in broadband penetration can generate a 1.2% increase in GDP per-capita in industrialised nations.

In the light of this, the European Commission, as part of its Digital Agenda, has set a series of extremely ambitious targets in the creation of new telecommunications infrastructure. These targets will enable:

• all citizens to have a 30 Mbps connection by 2020
• at least 50 per cent of the population to have access to a 100 Mbps connection.

These objectives are believed essential for smart, sustainable and inclusive growth, however pursuing them will by no means be easy, from both a regulatory and financial point of view. The availability of fibre-optic networks in Europe is still well below their reach in the United States and South-East Asia - few in Europe have access to superfast Internet connections, whereas in countries such as Japan and South Korea it is considered the norm.

In all the statistics showing levels of digitalization and the digital literacy of the population, Italy underperforms with respect to the European average and to the continent’s major economies. This is the case not just as concerns the population at large but also the economic fabric and public administration. For a sector as extremely articulated as the digital sector, infrastructure is a central pivot for the key interests of all the players involved, both public and private.

Broadband investment has both direct effects, linked to the construction of new networks, and indirect effects, connected with all the economic activities that benefit from the potential of more efficient infrastructure and which drive the overall growth of social systems, improving the efficiency of business, boosting productivity and fostering innovation and employment growth.

A smart mix of different technologies

A smart mix of different technologies needs to be identified (fixed line and mobile, fibre-optic and copper) that can enable objectives to be met while optimising investments. In this context, various development scenarios can be conceived.

One possible solution would be to build FTTH infrastructure (or FTTB at least, with the network then completed with vertical connections) in areas of high population density and economic activity, relying on the FTTCab + Vectoring model to extend ultra-broadband to the rest of the country, also through the integration of an LTE next generation mobile network able to reach areas showing a first-level digital divide.

While ultra-broadband infrastructure in urban areas with a high population density and economic activity can be financed through private investment, the issue to be resolved over the forthcoming years will be that of extending network coverage to less populated districts and rural areas, where profit margins are unlikely to be sufficient to cover the massive investment needed.

In this scenario, state intervention could focus on fostering private sector initiatives through the simplification of the regulatory framework and streamlining of authorisation procedures and on supporting demand (digital literacy, expansion of government services), while reserving public funding for efforts to bridge the first-level digital divide and the creation of networks in areas of market failure.