Italy - Telecoms, IP Networks, Digital Media and Forecasts

Countries covered: Italy This report provides a comprehensive overview of trends and developments in Italy's telecommunications market. The report analyses the mobile, Internet, broadband, digital TV and converging media sectors. Subjects include: Market and industry analyses, trends and developments; Facts, figures and statistics; Industry and regulatory issues; Infrastructure; Major players, revenues, subscribers, ARPU, MoU; Internet, VoIP, IPTV; Mobile voice and data markets; Broadband (FttH, DSL, cable TV, wireless); Convergence and digital media; 3G subscriber and mobile ARPU forecasts to 2015; Broadband market forecasts for selective years to 2020. Key developments: Analogue TV spectrum auction troubled by broadcaster compensation claims; Dahlia TV folds; Sky Italia and Fastweb team to provide bundled services; State Council allows Sky Italia withdraws from tender for DTT frequencies; TivùSat reports over one million active cards; NGN Committee works on open access network, Fastweb, Wind and Vodafone continuing with ?2.5 billion NGN project; Milan's Metroweb sold to F2i and IMI Investimenti; TI sets up JV to build open access fibre network covering 80% of buildings in Milan; Fastweb bundles broadband with Sky Italia; Fastweb buys 11% of Metroweb; Regulator addresses fibre network open access; proposed FiberCo to coordinate fibre deployments to 20 million people in 15 cities by 2015; Telecom Italia commitment to deliver FttH/FttB to an additional 138 cities by 2018; regulator extends 3G licences to 2029 and GSM licences to 2027; Vodafone introduces Booster femtocell unit, TIM contracts NSN for 7,000 LTE base stations; mobile market value fell to ?21 billion in 2010; TIM to close mobile TV service; 3 Italia signed a seven-year managed services contract with Ericsson; Digi Mobil launched mobile services tailored to Romanians in Italy; regulator proposes lower MTRs to 2015; spectrum auction opens up LTE sector and delivers ?3.945 billion for the government; regulator market data to end-2010; operator data to September 2011. Companies covered in this report include: Telecom Italia, Wind, Fastweb, Tiscali, Sky Italia, Tivùsat, BT Italia, Metroweb, Vodafone, Wind.

Additional Information

Italy’s spectrum auction anticipating LTE growth in 2012BuddeComm’s quarterly publication, Italy - Telecoms, IP Networks, Digital Media and Forecasts, provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in one of Europe’s key telecom markets. It includes the regulator’s annual market data for 2010 as well as operator data to the third quarter of 2011.

Italy’s large telecom market has been deeply affected by the economic crash which has morphed into a general crisis among Eurozone countries. The austerity package passed by the parliament in mid-2011, worth some €48 billion, was intended to soothe fears among investors that the country would fail to manage its €1.9 trillion debt mountain. The package has proved insufficient, leading to higher borrowing costs on the bond market and the replacement of the prime minister. The reduction in household spending, at about 2.5% in 2011, will further restrict telecom sector growth during the next two years, contributing to tighter conditions among operators suffering from lower revenue. The deflationary pressure on telecom services will also mean that operators will struggle to meet their investment and loan repayment commitments.

In 2011, the Italian telecoms services market was worth about €20 billion, a slight fall from 2010. The multimedia and data services sectors grew slightly, offsetting the decline in the fixed-line market which is expected to reach only €8 billion in 2011 compared to about €8.5 billion in 2010. The internet access market, worth €4.3 billion in 2010, is estimated at about €4.4 billion in 2011. One of the main drivers continues to be mobile data services, with mobile network operators (MNOs) providing a greater range of advanced mobile broadband services.

Despite liquidity issues, MNOs in late 2011 paid some €3.94 billion for blocks of spectrum in the 800MHz, 1800MHz, 2GHz and 2.6GHz bands. This will enable them to provide commercial LTE services, with commercial launches expected during 2012. Developing the mobile broadband sector is crucial for MNOs to weather the continuing downturn in mobile voice revenue, and so raise overall ARPU.

Italy’s internet market continues to grow steadily, with internet user penetration of about 65% by mid-2011 and broadband penetration broaching 22%. The DSL sector has shown steady growth in the absence of competition from cable networks, though fibre-based broadband will lead to a smaller DSL subscriber base in coming years as the fibre infrastructure matures. FttH projects are concentrated among the main cities, although there are a number of municipal projects which supplement the efforts of telcos.

Under the auspices of the NGN Committee is the ‘Fibre for Italy’ project which aims to bring fibre to 20 million people in 15 of the largest cities by 2015. The incumbent Telecom Italia is in addition committed to bringing FttH/FttB to a further 138 cities by 2018. The Committee guidelines for building the NGN were criticised by a number of altnets for failing to include their proposals. Fastweb, Vodafone and Wind subsequently signed an MoU with the Ministry of Economic Development and several other telcos (including TI, Tiscali, H3, BT Italia) to set up a vehicle company (FiberCo) to oversee passive infrastructure. The regulator was charged with developing a regulatory framework for equal access to the open infrastructure, focused on areas, where no operator has scheduled fibre roll out.

Key telecom parameters - 2010; 2012
Sector20102012 (e)

Broadband:

Fixed broadband subscribers (million)13.414.7
Fixed broadband penetration rate22%27%
Mobile broadband users (million)10.914.5
 Fixed-line telephony (million)20.219.3
Mobile phone (million)88.289.1
Mobile penetration (population)150%154%
(Source: BuddeComm)

Market Highlights

Recent auctions for a broad range of spectrum will enable MNOs to launch commercial LTE services during 2012, supplemented by HSPA+. The move will boost national broadband connectivity while spearheading the valuable mobile data sector.Tivù Sat, from RAI, Mediaset and Telecom Italia Media, now has more than one million activated cards. The broadcaster’s competitive edge against SKY Italia was boosted by the latter’s recent withdrawal of an application for DTT frequencies.Fibre networks are concentrated in the main cities, which are cheaper and easier to service. There were about 400,000 active FttH connections in mid-2011, while the number of connected households reached about 2.7 million. Regulatory controls are required to push fibre further into the regions, or here is a risk that Italy will become a two-tier broadband nation.ASO has kept to schedule, though digital switchover affecting the last regions may be brought forward given the high proportion of residents in these areas which have already switched to digital TV. In line with developments elsewhere in Europe, digital dividend spectrum will be used primarily for mobile broadband services when available. This report is essential reading for those needing high level strategic information and objective analysis on the telecom sector in Italy. It provides further information on:

Market liberalisation and regulatory issues;
The impact of the global economic crisis;
Telecoms operators - privatisation, acquisitions, new licences;
Mobile data market developments in coming years in light of spectrum auctions and new license awards in 2011;
3G developments, regulatory issues and technologies including HSPA and LTE;
Broadband migration to an FttH architecture;
Historical and current subscriber statistics and forecasts;
ARPU statistics and forecasts. Data in this report is the latest available at the time of preparation and may not be for the current year.

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