Italys Socrate Project Switches to ADSL

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Milan, Italy -- Progetto Socrate, national telco Telecom
Italia's digital fiber optic cable project, has been curtailed for the second time
since it was announced in 1995.

The planned fiber optic approach will be augmented by
asynchronous digital subscriber line technology, which the company says has now advanced
sufficiently to make using it feasible.

The original plans for Socrate, which stipulated that the
company would keep its technological options open, called for 10 million homes to be
passed with fiber optics by early next century. The amount of investment in the project
was initially pegged at 13 trillion lire (almost $1 billion).

Replacing the fiber optic technology in new builds with
ADSL will not save much money, company sources said, forecasting that at least L4.5
trillion ($256 million) would be spent by 1999.

The change is in the mix of investments. Under the original
plan, about three-quarters of the money to be spent was to go to finance digging up city
streets to lay cable. That money will now mostly be spent on the ADSL technology.

Socrates' growth targets were cut in half last year,
to 5 million homes passed by the end of 1998. Currently, Telecom Italia predicts that
around 2.5 million will be passed by year-end, up from 1.4 million at the end of 1997.
Telecom Italia said it remains committed to installing a wideband network covering the
major cities on the peninsula. The only thing that has changed is the technology.

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