Talk to almost any expert about the future of European telecommunications, and sooner or later, the name ‘FastWeb' will come up, usually spoken of in reverential terms.
The Italian company, which started inauspiciously as a joint venture of a power company and an Internet service provider in the heady dot-com days of 1999, has become one of the great success stories of modern telecoms.
To its 400,000 customers, FastWeb is admired not only because it delivers an average of 6 Mbps (megabits per second) of connectivity for less than giants such as BT charge for under half a megabit, but it also offers advanced services, such as voice and video conferencing.
To technologists, it is admired because it has effectively and rapidly implemented all these services on a single, converged IP network, that, in addition to data connectivity, handles some 8 million voice calls a day. Its services, including IP Centrex services for over 1,000 small business customers, have an uptime of 99.997%.
FastWeb's technical achievements have made it a poster-child customer for its suppliers, among them Cisco, Hewlett-Packard Consulting, National Semiconductor and voice-over-Internet Protocol (VoIP) and video-IP provider NetCentrex.
But most impressively of all, FastWeb is repeatedly cited as a pathfinder for the rest of the telecoms industry, because it has found a way to make good money in a world of unmetered voice and video calls. FastWeb's annual ARPU (average revenue per user) reached E908 in early 2004 – making it one of the highest in the world. The European average is E220. "FastWeb drives one of the highest ARPUs we have seen," said Peter Ingram, the former CTO of BT Retail.
Like many service providers, FastWeb set out to compete against the incumbent giant (Telecom Italia) by offering an Internet service. It began with a big advantage: its shareholder, the power supplier AEM, contributed the ducts through which it was able to lay its fibre right to the user's door.
From the start, FastWeb, now a wholly owned division of publicly listed e.Biscom, set out to be a ‘triple play' supplier, offering voice, data and video services. It knew that Internet usage in Italy was too low to make money only from data.
In a clear sign to both corporate and carriers elsewhere, it was voice that proved to be key. "After the initial validation period, our telephone service experienced explosive growth – over 1,000 new subscribers per day," said Guido Garrone, CTO of FastWeb.
Importantly, using a NetCentrex VoIP softswitch, FastWeb is able to conform to a tight Italian regulatory regime, providing, for example, number portability, and the ability to record or trace IP calls for emergency services. Although basic connectivity is relatively cheap, FastWeb charges incrementally more for call waiting, forwarding, conferencing and voicemail.
Video is becoming more important, with video conferencing, games and video on demand all popular. Its main VoIP supplier, NetCentrex, is working on technology to route video calls through to 3G mobiles.