2 minute read
Mark Halper

Think “Italy,” and you’ll probably envision sun, pasta, amore, corruption–but not broadband. Think again. Led by Silvio Scaglia, 44, Italy is among the world leaders in a technology called “fiber to the home,” which transmits 20 to 200 times as fast as the DSL and cable-broadband services common around the globe. That fiber is fast enough to deliver movies without any hiccups, and to send songs in seconds rather than minutes. Scaglia and his company, e.Biscom, are funneling feature films and sitcoms–plus conventional Web and phone services–to PCs and TVs in six major Italian cities. Born during the late-’90s Internet boom, e.Biscom is on a steady growth path in a cooled-down economy. “The idea is to create a network with no bandwidth limitation,” says Scaglia.

Fiber networks, notes analyst Michael Philpott of London research firm Ovum, are “future proof,” meaning it’s hard to imagine anything coming along that’s faster. Scaglia, a telecommunications engineer and ex-CEO of Italian mobile-phone operator Omnitel, co-founded e.Biscom with Italian financier Francesco Micheli in 1999. A public stock offering in March 2000 raised $1.5 billion. The company now has about 145,000 fiber customers who connect through e.Biscom’s FastWeb service, plus an additional 100,000 who access FastWeb’s souped-up DSL service. While 145,000 fiber customers might not sound like a lot, it’s four times the number of fiber users in the U.S. With Scaglia’s drive, Italy trails only a few tech-fanatic outposts like Sweden and Japan in fiber to the home.

FastWeb has grown into the No. 2 broadband provider in Italy, behind giant Telecom Italia. Massimo Castelli, director of marketing for that firm’s domestic wireline division, admits of e.Biscom, “In terms of pure technology and service, they clearly have a more innovative offering than we have.” One innovation is FastWeb’s selection of some 3,000 video titles, including 1,000 Hollywood films, routed directly to customers’ TV sets. Viewers like the service, paying between $3.50 and $7 per film. The studios get 50% to 60% of that, but the remainder adds to FastWeb’s impressive annual revenue per user of $845. That’s more than twice the $385 per user at Telecom Italia. The company forecasts a pretax loss of around $300 million for 2003, but Scaglia expects to break even in 2005. He’s proving that it can pay to be a technology maverick–even in the post-dotcom era. –By Mark Halper

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