Communication (Italian market)

Economy of Italy

• Economy of Italy

2023

80% of telecom workers in Italy went on strike

In early June 2023, Italy's telecommunications sector was overwhelmed by a large-scale strike, in which about 80% of employees of companies from the relevant sphere took part. Workers are concerned about the current market situation, planned mass layoffs and upcoming changes in general.

The action is reportedly organised by Italy's three largest telecoms unions - SLC-CGIL, FISTel-CISL and UILCOM-UIL. Thousands of employees of telecom companies from all over the country gathered in the Santi Apostoli Square in Rome with the slogans Riprendiamoci il futuro - "Let's return the future." Industry workers oppose numerous controversial initiatives and a number of transactions planned by market participants.

Italy's telecoms sector swept by massive strike

Telecommunications was once synonymous with modernity, but today this sector is exploited by financiers who treat our companies like ATMs, that is, sometimes rob them, "said Riccardo Saccone, national secretary of SLC-CGIL.

The dissatisfaction of employees, in particular, is related to the intention of the Vodafone Italia operator to reduce the number of personnel by about 1000 people in various departments. In addition, the plans of the telecommunications company Wind Tre for the division of assets are of concern: it is assumed that the Swedish investment fund EQT will acquire a 60 percent stake in its infrastructure business. This initiative provides for personnel changes that will affect 2,000 of the company's approximately 6,500 employees. The controversy also stems from plans by Telecom Italia (TIM), with a staff of around 40,000, to split the business into two key entities - an infrastructure unit (NetCo) and a separate service unit (ServiceCo).^[1]

Italy allocated 1.5 billion euros to support telecom operators who are forced to work at a loss

On May 19, 2023, it became known that the Italian Ministry of Industry had developed a set of measures aimed at supporting local telecommunications companies in a difficult situation. This program to stimulate the industry can cost the authorities approximately €1.5 billion.

It is noted that telecom operators in Italy faced a number of problems due to the emerging macroeconomic situation and geopolitical uncertainties. Severe price competition, rising energy costs, reduced purchasing power of subscribers and slower investments in IT projects by corporate users have a negative impact on business. These factors have led to the fact that some Italian operators are forced to work at a loss, and they do not have the necessary funds to modernize the telecommunications infrastructure.

Industry incentive program could cost Italian authorities approximately €1.5 billion

According to Reuters, in accordance with the support mechanism of the Ministry of Industry, fees related to the payment of energy resources will be reduced. This measure will apply to companies that the state considers "strategically important," including telecom providers. Assistance is proposed to be provided within three years - until 2025. In addition, the Italian authorities intend to provide tax breaks to operators.

The costs in the two specified areas of support are estimated at €1.2 billion from 2023 to 2025. These measures require the approval of the European Commission to come into force. Another approximately €200 million will support operators transferring their data lines from copper channels to fiber optic ones. About €145 million will be directed by the authorities to finance plans for the early retirement of elderly industry workers in order to hire younger specialists.^[2]

2018

Internet penetration compared to other countries

2018

Italy sold frequencies for 5G networks for 6.5 billion euros

In October 2018, an auction for frequency allocation for fifth generation (5G) networks ended in Italy. In total, the operators paid 6.5 billion euros in favor of the Italian government, which, according to the Financial Times (FT), is in dire need of money.

The auction lasted two weeks and ended on October 2. The most acute struggle unfolded over frequencies in the 3.7 GHz band, which provide the strongest signal in urban conditions. Telecommunications companies alone spent about 4.35 billion euros on them.

Italy raised 6.5 billion euros from the sale of radio frequencies at an auction to create 5G networks

Telecom Italia paid 2.5 billion euros, of which 1.7 billion euros went to the 80 MHz band in the 3.7 GHz band. In addition, the operator acquired 5G frequencies in lower and higher bands. The company hopes that the acquired assets will allow Telecom Italia to strengthen its leadership in the domestic telecommunications market.

Following the auction, Vodafone paid 2.4 billion euros for a large block of frequency resources. Nick Read, who led the company in October 2018, said European authorities need to avoid artificial auctions that prevent the industry from achieving a "healthy balance sheet."

The 20-MHz frequency block in the 3.7 GHz band cost Wind Tre (part of CK Hutchison) 517 million euros. The same sum included frequencies in high bands. Another bidder was France's Iliad, which won €1.19 billion worth of frequencies. Finally, Fastweb, owned by Swisscom, will receive frequencies estimated at 33 million euros.

However, not all frequencies are available to operators immediately after the auction. So, the frequencies of 3.7 GHz can be used from January 1, 2019, while the frequencies of 700 MHz are unlikely to be released before 2022. As noted by the FT, the Italian authorities earned twice as much on the sale of frequencies as expected.^[3]

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