2010 Italy - Telecoms, IP Networks, Digital Media and Forecasts

Publication Overview

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.

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 licence awards in 2010;
  • 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.

 

Researcher:- Henry Lancaster

Current publication date:- November 2010 (9th Edition)

Next publication date:- November 2011

Executive Summary

Italy’s fractured NGNs needing greater regulatory control

BuddeComm’s annual 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.

Italy has the fourth largest telecom market in Europe. The country has been deeply affected by the economic crash which has continued to linger since mid-2008. In 2009, GDP fell by about 5%, though growth in both 2010 and 2011 is expected to recover to about 1%. The reduction in household spending was about 2.5% in 2009 and investment in fixed networks fell by almost 17%. There remains deflationary pressure on communications services as operators struggle to meet their investment commitments while consumers have reined in non-discretionary spend.

According to the regulator, in 2009 the telecoms sector grew 1.7% year-on-year compared to a European average of -0.8%. In the fixed-line telephony sector, affected by fixed-mobile substitution and consumer switch to voice-over-IP services, 2009 marks the first year in which lower voice revenue (down €13.3 billion year-on-year) was not compensated by growth from data and Internet services (only €9.6 billion).

Although there are a number of fixed voice operators, just four of them control 90% of the market in terms of retail revenues. Telecom Italia’s share in the fixed voice market has fallen to about 60%, while its share in the lucrative broadband market is about 56%.

Italy’s Internet market continues to grow steadily, with Internet user penetration of about 58% by mid-2010 and broadband penetration approaching 24%. The ADSL broadband sector has also shown steady growth in the absence of competition from cable networks. FttH projects are concentrated among the main cities, although there are a number of municipal projects which supplement the efforts of telcos.

The deployment of NGNs is relatively nascent in Italy. The government’s contribution to developing a national All-IP network, originally muted at €1.47 from public and European Community funds, has been scaled down as a result of its own budget restraints. The regulator has formulated network sharing frameworks among the chief players, but thus far Telecom Italia has guarded its business independence and is pursuing its own €6.5 billion NGN investment while a consortium including Fastweb, Wind and Vodafone are building an NGN of their own, at an initial cost of €2.5 billion to cover 15 cities. The potential for network duplication, combined with the debt burden carried by the incumbent, risks derailing these plans unless the regulator shows sharper teeth in forcing through the same measures successfully adopted by other NRAs.

In the mobile sector Italy has one of the strongest markets in Europe, with mobile penetration far above the EU average and a large 3G subscriber base. The market was worth an estimated €17.2 billion in 2010. Market saturation has led to slower growth in recent years, while regulated MTRS and roaming fees, combined with fierce competition among players, will further lower revenue during the next two years. From 2012, subscriber contracts based on LTE will enable high-end data services to counter-balance the continuing decline in voice revenue.

Key telecom parameters – 2009; 2011

Sector

2009

2011 (e)

Broadband:

Fixed broadband subscribers (million)

12.4

14.5

Fixed broadband penetration rate

21%

27%

Mobile broadband users (million)

9.9

13.5

Subscribers to telecoms services:

Fixed-line telephony (million)

20.2

19.3

Mobile phone (million)

88.2

89.1

Mobile penetration (population)

150%

154%

(Source: BuddeComm)

Market highlights:

  • Italian MNOs are progressing with LTE trials with a view to launching commercial services in 2011 and 2012. Telecom Italia plans to cover Milan and Rome initially, supplemented by Evolved HSPA.
  • Most investment by MNOs has gone to providing HSPA and LTE software upgrades and improving the performance of GSM networks. While the number of mobile broadband subscribers has increased, this has yet to translate into greater mobile data use or revenue. The number of 3G subscribers is expected to reach some 62 million by 2015, representing almost 70% of all mobile subscribers.
  • Fibre networks are concentrated in the main cities, which are cheaper and easier to service. There were about 385,000 active FttH connections in mid-2010, while the number of connected households reached about 2.5 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.
  • MNOs have busily supplemented rural areas underserved by fixed-line broadband with wireless solutions. Vodafone’s HSPA+ network, benefiting from a €1 billion investment, is aimed at reaching 1,800 towns having no wireless broadband access by 2014, providing at least 2Mb/s.
  • ASO has kept to schedule, though digital switchover affecting the last regions may be brought forward to 2011 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.

Henry Lancaster

November 2010

Data in this report is the latest available at the time of preparation and may not be for the current year.

Table of Contents

  • 1. Key Statistics
  • 2. Telecommunications Market
    • 2.1 Overview of Italy’s telecom market
  • 3. Regulatory Environment
    • 3.1 Regulatory authority
      • 3.1.1 Communications Regulatory Authority (AGCOM)
    • 3.2 Telecom sector liberalisation in Italy
      • 3.2.1 Privatisation of Telecom Italia
      • 3.2.2 Interconnect
      • 3.2.3 Access
      • 3.2.4 Number portability (NP)
      • 3.2.5 Carrier PreSelection (CPS)
  • 4. Fixed Network Operators
    • 4.1 Overview of operators
    • 4.2 Telecom Italia
      • 4.2.1 Performance in 2010
      • 4.2.2 Losing direction?
      • 4.2.3 Organisational change
      • 4.2.4 Functional separation
      • 4.2.5 Company sale
    • 4.3 Wind
    • 4.4 BT Italia
    • 4.5 Tiscali
      • 4.5.1 Tiscali statistical data
    • 4.6 Fastweb
      • 4.6.1 Fastweb statistical data
  • 5. Telecommunications Infrastructure
    • 5.1 National telecom network
    • 5.2 International
      • 5.2.1 Submarine cable networks
      • 5.2.2 Satellite networks
    • 5.3 Infrastructure developments
      • 5.3.1 Next Generation Network (NGN)
  • 6. Broadband Market
    • 6.1 Overview
      • 6.1.1 Broadband statistics
      • 6.1.2 Government support
      • 6.1.3 Regional development
    • 6.2 Cable modems
    • 6.3 Asymmetrical Digital Subscriber Line (ADSL)
      • 6.3.1 Wholesale market
      • 6.3.2 Telecom Italia
      • 6.3.3 Fastweb
      • 6.3.4 Tiscali
      • 6.3.5 Wind
      • 6.3.6 ADSL2+
      • 6.3.7 Naked DSL
    • 6.4 Fibre-to-the-Home (FttH) networks
      • 6.4.1 Overview
      • 6.4.2 Telecom Italia
      • 6.4.3 Fastweb
      • 6.4.4 Rival networks
      • 6.4.5 Other developments
    • 6.5 Wireless broadband
      • 6.5.1 Wireless Local Loop (WLL)
      • 6.5.2 Wireless LANs/WiFi
      • 6.5.3 WiMAX
    • 6.6 Mobile broadband
      • 6.6.1 Internet via satellite
  • 7. Convergence
    • 7.1 Key general trends
    • 7.2 Business models
      • 7.2.1 Bundled services
    • 7.3 Regulatory issues
      • 7.3.1 VoIP
    • 7.4 Digital TV (DTV)
      • 7.4.1 Broadband (IPTV)
      • 7.4.2 Cable TV (CATV)
      • 7.4.3 Satellite-based digital pay TV developments
      • 7.4.4 Digital Terrestrial TV (DTTV)
      • 7.4.5 Analogue switchover
      • 7.4.6 The digital TV network in Italy
      • 7.4.7 Digital cinema
      • 7.4.8 Video-on-Demand (VoD)
      • 7.4.9 Personal Video Recorders (PVRs)
      • 7.4.10 Free-to-Air (FTA) TV
    • 7.5 VoIP
  • 8. Mobile Communications
    • 8.1 Overview of Italy’s mobile market
      • 8.1.1 Mobile statistics
      • 8.1.2 Operator market shares
    • 8.2 Regulatory issues
      • 8.2.1 Spectrum regulations and spectrum auctions
      • 8.2.2 Roaming
      • 8.2.3 Network sharing
      • 8.2.4 Number portability
      • 8.2.5 Mobile termination
      • 8.2.6 Fixed-mobile convergence (FMC)
    • 8.3 Mobile technologies
      • 8.3.1 Digital
      • 8.3.2 Third Generation (3G) mobile
    • 8.4 Major mobile operators
      • 8.4.1 3 Italia
      • 8.4.2 TIM
      • 8.4.3 Vodafone Italy
      • 8.4.4 Wind
      • 8.4.5 MVNOs
    • 8.5 Mobile voice services
      • 8.5.1 Prepaid
    • 8.6 Mobile messaging
      • 8.6.1 Short Messaging Service (SMS)
      • 8.6.2 Multimedia Messaging Services (MMS)
    • 8.7 Mobile data services
      • 8.7.1 Overview
      • 8.7.2 Mobile banking/ticketing
      • 8.7.3 General Packet Radio Service (GPRS)
      • 8.7.4 High-Speed Packet Access (HSPA)
      • 8.7.5 Femtocells
      • 8.7.6 iPhone
      • 8.7.7 Mobile TV
      • 8.7.8 Long-term evolution (LTE)
    • 8.8 Mobile content and applications
      • 8.8.1 Location-based services
  • 9. Forecasts
    • 9.1 Forecasts – broadband subscribers
      • 9.1.1 Scenario 1 – higher broadband subscriber growth
      • 9.1.2 Scenario 2 – lower broadband subscriber growth
    • 9.2 Forecasts – mobile ARPU – 2009 - 2015
    • 9.3 Forecasts – UMTS subscribers – 2009 - 2010; 2015
  • 10. Glossary of Abbreviations
  • Table 1 – Country statistics Italy – 2010
  • Table 2 – Telecom revenue and investment statistics – 2009 (e)
  • Table 3 – Telephone network statistics – January 2010
  • Table 4 – Internet user statistics – June 2010
  • Table 5 – Broadband statistics – April 2010
  • Table 6 – Mobile statistics – 2010
  • Table 7 – National telecommunications authority
  • Table 8 – Telco market share, fixed and mobile services – 2008 - 2009
  • Table 9 – Fixed termination rates by company – 2007 - 2010
  • Table 10 – Telecom Italia wholesale access lines – 2007 - 2010
  • Table 11 – LLU, shared access price – connection, monthly rental – 2006 - 2009
  • Table 12 – CPS lines – 2005 - 2010
  • Table 13 – Fixed-network access by type – 2008 - 2010
  • Table 14 – Fixed-network share by operator – March 2010
  • Table 15 – Wind subscribers by sector – 2006 - 2010
  • Table 16 – Wind annualised fixed-line ARPU – 2006 - 2010
  • Table 17 – Wind financial data by sector – 2006 - 2010
  • Table 18 – Total fixed broadband subscribers by access type – 2002 - 2011
  • Table 19 – Broadband penetration by technology – 2004 - 2010
  • Table 20 – Broadband lines by operator and technology – 2007 - 2009
  • Table 21 – Broadband revenue – 2008 - 2009
  • Table 22 – Broadband market share of revenue by operator – 2009 - 2009
  • Table 23 – Broadband market share of subscribers by operator – March 2010
  • Table 24 – Telecom Italia NGN2 FttX deployment – 2009 - 2011
  • Table 25 – Telecom Italia share of broadband connections – 2008 - 2010
  • Table 26 – Telecom Italia wholesale access lines – 2007 - 2010
  • Table 27 – Telecom Italia fibre accesses – 2007 - 2010
  • Table 28 – Telecom Italia projected network cabinets – 2008 - 2010
  • Table 29 – Mobile broadband subscribers by type – 2008 - 2009
  • Table 30 – Telecom Italia mobile broadband revenue – 2008 - 2009
  • Table 31 – Statistical overview of Italy’s broadcasting market – April 2010
  • Table 32 – Pay TV subscribers by technology – 2003 - 2010
  • Table 33 –TV revenue by platform – 2008 - 2009
  • Table 34 –TV revenue by operator, market share – 2009
  • Table 35 – Fastweb IPTV subscribers – 2008 - 2009
  • Table 36 – Cable TV subscribers and penetration rate – 1996 - 2011
  • Table 37 – Forecast satellite TV subscribers – 2007 - 2013
  • Table 38 – DTTV receivers, forecasts and annual change – 2004 - 2013
  • Table 39 – Mobile operators, subscribers and annual change – June 2010
  • Table 40 – Mobile market share of revenue by operator – 2008 - 2009
  • Table 41 – Mobile market share by operator – 2004 - 2010
  • Table 42 – Mobile termination rates – 2008 - 2012
  • Table 43 – TIM revenue by sector, annual change – 2008 - 2010
  • Table 44 – Vodafone revenue by sector – 2008 - 2010
  • Table 45 – Wind operational statistics and revenue – 2005 - 2010
  • Table 46 – MVNO market share of MVNO subscribers – 2008 - 2010
  • Table 47 – Vodafone data as proportion of revenue – 2005 - 2010
  • Table 48 – Forecast broadband subscribers – higher market growth scenario – 2009 - 2013; 2020
  • Table 49 – Forecast broadband subscribers – lower market growth scenario – 2009 - 2013; 2020
  • Table 50 – Forecast mobile ARPU – 2009 - 2015
  • Chart 1 – Index of base prices, fixed and mobile services – 2007 - 2009
  • Chart 2 – Fixed and mobile market investment – 2004 - 2009
  • Chart 3 – Telecom market investment – 2004 - 2010
  • Chart 4 – Total fixed and mobile market revenue – 2006 - 2009
  • Chart 5 – Wholesale revenue, fixed and mobile market – 2008 - 2009
  • Chart 6 – Retail revenue, fixed and mobile market – 2008 - 2009
  • Chart 7 – Telecom Italia WLR lines – 2008 - 2010
  • Chart 8 – Cumulative numbers ported – 2002 - 2009
  • Chart 9 – Telecom Italia fixed-line accesses by sector – 2006 - 2010
  • Chart 10 – Telecom Italia fixed network revenue by sector – 2006 - 2010
  • Chart 11 – Telecom Italia Group revenue – 2006 - 2010
  • Chart 12 – Telecom Italia domestic revenue – 2005 - 2010
  • Chart 13 – Tiscali subscribers (Italy) – 2007 - 2010
  • Chart 14 – Tiscali financial data – 2008 - 2010
  • Chart 15 – Tiscali revenue by sector (Italy) – 2006 - 2010
  • Chart 16 – Fastweb financial data – 2005 - 2010
  • Chart 17 – Fastweb broadband subscribers – 2005 - 2010
  • Chart 18 – Telecom Italia access lines – 2008 - 2010
  • Chart 19 – Internet subscribers and penetration rate – 2002 - 2011
  • Chart 21 – Telecom Italia broadband subscribers by sector – 2006 - 2010
  • Chart 22 – Telecom Italia broadband ARPU – 2006 - 2010
  • Chart 23 – Telecom Italia broadband revenue – 2006 - 2010
  • Chart 24 – Fastweb financial data – 2005 - 2010
  • Chart 25 – Fastweb broadband subscribers – 2005 - 2010
  • Chart 26 – Tiscali subscribers (Italy) – 2007 - 2010
  • Chart 27 – Tiscali financial data – 2008 - 2010
  • Chart 28 – Wind broadband subscribers – 2005 - 2010
  • Chart 29 – FttH accesses – 2004 - 2011
  • Chart 31 – Distribution of TV households by platform – 2008 - 2010
  • Chart 32 – Distribution of digital TV households by platform – 2008 - 2010
  • Chart 33 – Pay TV revenue by platform – 2008 - 2009
  • Chart 34 – TV revenue by platform – 2008 - 2010
  • Chart 35 – Telecom Italia IPTV subscribers – 2007 - 2010
  • Chart 36 – SKY Italia subscribers – 2006 - 2010
  • Chart 37 – SKY Italia financial data (year to Jun) – 2007 - 2010
  • Chart 38 – Mediaset financial data (Italy) – 2008 - 2010
  • Chart 39 – Mediaset Premium active clients – 2007 - 2010
  • Chart 40 – Telecom Italia VoIP subscribers – 2006 - 2010
  • Chart 41 – Mobile subscribers and penetration rate – 2002 - 2011
  • Chart 42 – Mobile market revenue – 2008 - 2010
  • Chart 43 – Revenue per active SIM – 2008 - 2011
  • Chart 44 – European roaming charges – 2007 - 2011
  • Chart 45 – Cumulative mobile numbers ported – 2003 - 2010
  • Chart 46 – UMTS/HSPA subscribers – 2004 - 2010
  • Chart 47 – 3 Italia mobile subscribers – 2008 - 2010
  • Chart 48 – 3 Italia annualised ARPU – 2008 – 2010
  • Chart 49 – 3 Italia mobile revenue – 2008 - 2010
  • Chart 50 – TIM mobile subscribers – 2005 - 2010
  • Chart 51 – TIM monthly ARPU – 2005 - 2010
  • Chart 52 – TIM revenue – 2005 - 2010
  • Chart 53 – Vodafone subscribers – 2001 - 2010
  • Chart 54 – Vodafone prepaid, contract and blended ARPU (€) – 2004 - 2010
  • Chart 55 – Vodafone mobile customer cost (year to March) – 2007 - 2010
  • Chart 56 – Wind annualised mobile ARPU – 2005 - 2010
  • Chart 57 – Wind mobile subscriber statistics – 2005 - 2010
  • Chart 58 – Fastweb mobile subscribers – 2008 - 2010
  • Chart 59 – MVNO mobile subscribers – 2008 - 2010
  • Chart 60 –MVNO revenue – 2008 – 2010
  • Chart 61 – SMS/MMS and other data revenue – 2008 - 2010
  • Chart 62 – Forecast UMTS subscribers and penetration rate – 2009 - 2010; 2015
  • Exhibit 1 – Access and the local loop
  • Exhibit 2 - Principal backbone providers – 2010
  • Exhibit 3 – WiMAX licensees – 2010
  • Exhibit 5 – UMTS auction results – 2000
  • Exhibit 6 – UMTS auction results – 2009

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