By MARK HALPER
Posted Sunday, June 29, 2003; 14.08BST
Think "Italy" and you'll probably envision sun, pasta, amore, corruption — and not broadband. Think again. Led by 44-year-old Silvio Scaglia, Italy — yes, Italy — just about leads the world in a technology called fiber to the home, which typically transmits 20 to 200 times faster than the DSL and cable-broadband services common around the globe. That's fast enough to deliver movies without any hiccups, and to send songs in seconds compared to the minutes it can take through other standards. CEO Scaglia and his company, Milan-based e.Biscom, are funneling feature films and television shows — in addition to conventional Web and phone services — to PCs and TVs in Milan, Rome, Florence, Naples, Bologna and Turin. Born in the late-'90s Internet boom, e.Biscom is now on a steady growth path in a cooled-down economy. "The idea is to create a network with no bandwidth limitation," says Scaglia.
As fiber to the home implies, e.Biscom runs fast optical-fiber wires all the way into consumers' living rooms. (Other systems rely partly on sluggish copper or coaxial wires.) Fiber networks, notes analyst Michael Philpott of London-based research firm Ovum, are "future proof," meaning it's hard to imagine anything coming along that's faster. Scaglia, a telecommunications engineer and ex-chief executive 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 and helped kick start operations. The company now has about 145,000 fiber customers in Italy who connect through e.Biscom's FastWeb service, plus another 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 more than the number of fiber users in the U.S., according to Tulsa, Oklahoma-based market-research firm Render, Vanderslice & Associates. With Scaglia's drive, Italy trails only a few no-surprise tech fanatics like Sweden and Japan in fiber to the home.
FastWeb has quickly grown into the No. 2 broadband provider in Italy, behind giant Telecom Italia, which has 1.1 million broadband customers. "Obviously, we are concerned," says Mass-imo Castelli, director of marketing for Telecom Italia's Domestic Wireline division. "In terms of pure technology and service, they clearly have a more innovative offering than we have." One of those innovations is FastWeb's selection of some 3,000 movie and 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 money adds to FastWeb's already 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. "I love start-ups," he enthuses. And with e.Biscom he's proving that it still pays to be a technology maverick — even in Italy.
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