Pirelli boosts e.Biscom international telecom expansion

A strategic alliance with the cash-rich Pirelli Cables and Systems SpA will provide a boost for the international expansion plans of the Italian broadband telecommunications and Internet group e.Biscom SpA, a spokeswoman for the company said Friday.

The two groups announced the strategic accord Thursday, with the Pirelli Cables group underpinning the agreement by buying a 1 percent stake in e.Biscom for 48.7 million euros (U.S. $42.8 million). The operation has a "strong international dimension," Pirelli chairman and chief executive officer Marco Tronchetti Provera said in a prepared statement.

The company declined to outline specific foreign investments, though it did stress the international aspects of the deal.

"For the moment it is premature to say what the international implications of this agreement will be," said e.Biscom spokeswoman Patrizia Rutigliano. "Foreign expansion is an important part of the accord, but I can't say any more than that."

The agreement, however, will be valid for five years and does provide for the two companies to collaborate in future foreign investments in fiber lines to the home and connectivity services, a joint statement said. Pirelli will have the right to participate in new investment initiatives which e.Biscom may pursue outside Italy, with the exception of Germany, where e.Biscom already controls 80 percent of HanseNet AG, the main alternative telecommunications operator to Deutsche Telekom AG in the Hamburg region. Meanwhile e.Biscom may participate in future investments that Pirelli makes in the area of e.Biscom's activity, the statement said.

Under the agreement, e.Biscom will provide Pirelli with Internet access under market conditions, and Pirelli will supply e.Biscom with all its fiber-optic cable needs, the statement said. The two companies will also collaborate on technological research and e.Biscom will perform beta testing on Pirelli's fiber to the home innovations, it said.

E.Biscom, which was quoted on Milan's New Market a year ago, has announced an ambitious plan to create a fiber-optic network linking Italy's major cities through its Fastweb subsidiary. It controls Italy's first purely online newspaper, Il, and has reached a content agreement with the U.S. news agency Associated Press.