2013 Italy - Telecoms, IP Networks, Digital Media and Forecasts

Regulated pricing brings down wholesale fibre access costs, stimulates fibre deployment

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 sectors of one of Europe’s largest markets. The report includes the regulator’s 2012 market data, telcos’ operating and financial data to Q1 2013 and market developments to mid-2013.

Telecom market overview

Italy has the fourth largest telecom market in Europe. Deeply affected by the country’s continuing economic difficulties, there remains deflationary pressure on telecom services as consumers cut back on discretionary spend. The base price for services continues to fall year-on-year, exacerbating operator’ falling revenue. This trend is expected to continue into 2014 as competition and regulated tariffs combine with changing customer usage of services. This has had a knock-on effect on investment as operators struggle to meet their investment commitments. Nevertheless, considerable efforts are being made to extend fibre networks, though outside a select few towns the cheaper FttC architecture dominates.

Mobile market

Mobile penetration is far ahead of the EU average, though distorted by the popular use of multiple SIM cards. The three largest MNOs have struggled with falling revenue and lower subscriber numbers during the last two years while the MVNO market has strengthened, broaching some five million subscribers by mid-2013. Market consolidation remains a possibility, with 3 Italia a distant fourth player. Talks on the operator’s potential merger with TIM were suspended in mid-2013 following the announcement that Telecom Italia would spin off its fixed-line infrastructure. Investments in LTE have led to a number of commercial launches, with operators planning to cover at least half of the population by the end of 2014. The trial of LTE by the WiMAX operator Linkem has shown the dominance of LTE over WiMAX among operators having access to technology-neutral spectrum.

Key telecom parameters – 2010; 2013

(Source: BuddeComm) 

Market Highlights

• TI plans to invest €10 billion in its fibre-optic infrastructure over the next ten years. The spending will help the company’s new network unit Opac to extend broadband access. The regulator’s pricing for wholesale access to TI’s infrastructure are lower than TI’s suggested pricing, making it cheaper for ISPs to provide FttC and FttH services.
• LTE trials by the WiMAX operator Linkem showcase the dominance of LTE for mobile broadband and the flexibility of spectrum usage.
• The IPTV sector has suffered from cross platform competition, with a number of services closing in recent years. At the end of 2012 Fastweb also closed down its IPTV offer, having seen the number of subscribers fall to about 200,000.
• In a bid to encourage greater competition, in 2013 the regulator banned RAI, Mediaset and Telecom Italia from applying for frequencies in the auction for three DTT multiplexes (L1, L2 and L3), reserving them for new entrants alone. Two lots are available to operators which already hold two multiplexes: RAI and Mediaset have four multiplexes and TI Media has three.
• Italy’s parliament has passed legislation to implement the EU’s Digital Agenda which requires faster broadband services to be delivered nationally by 2020. Part of this legislation includes a €750 million investment to expand broadband access in underserved areas.
• Fastweb’s €300 million project with TI and the local energy utility operator in Rome, ACEA, will extend fibre-optic coverage across in the city, delivering 100Mb/s services to over one million premises by the end of 2014 via a newly deployed 4,000km network. 

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;
• 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.