1. Vodafone Italy, which competes with Telecom Italia (TIM), has acquired spectrum to enable the deployment of 5G technology for €2.4 billion during the 5G spectrum auction that fetched $7.6 billion for the Government.
The Italian Government will collect 1,250 million euros from all mobile operators during the current year, 50 million in 2019, 300 million in 2020, 150 million in 2021, and the remaining in 2022 from the 5G auction.
Though telecom operators will be releasing the spectrum auction money in the next five years, it will pose challenges to the telecom industry in Italy. Bloomberg reports that 5G spectrum auction in Italy was a record as compared with the auction in South Korea.
“Spectrum auctions should be designed to balance fiscal requirements with the need for investment to enable economic development. It is critical that European governments avoid artificial auction constructs which fail to strike a healthy balance for the industry,” Nick Read said in a statement.
Vodafone Italy, the second largest telecom operator, posted €1.231 billion revenue registering 6.5 percent drop in the first quarter ended 30 June 2018 against 0.7 percent increase in Q4 of previous fiscal.
Vodafone Italy and other operators are facing competition following the launch of a new entrant in late May. Vodafone Italy launched a new secondary brand to specifically address the needs of customers in the value segment of the market.
Vodafone Italy said the 5G spectrum will deliver network operating cost efficiency to meet the expected future growth in data traffic.
Vodafone Italy is buying 3700 MHz – 80 MHz for €1,685 million, 700 MHz – 2 x 10 MHz FDD for €683 million and 26 GHz – 200 MHz for €33 million.
Vodafone Italy will be using the 3700 MHz spectrum to enhance coverage, improve capacity, and for rapid development of 5G services. Vodafone Italy did not reveal the timing of its planned 5G launch in Italy.
Vodafone Italy will also utilize the 700 MHz spectrum, when it is available from 2022, to deploy 5G services, providing nationwide coverage at very high speed and very low latency for including IoT, virtual and augmented reality, connected vehicles and robotics. This indicates that Vodafone Italy will be playing in both the business and consumer markets of 5G to improve ARPU.
Vodafone Italy said it can also use the 26 GHz spectrum to deliver high capacity services in densely populated locations such as city centres, sports stadiums or industrial plants.
Vodafone said it is leading 5G trials promoted by the Ministry for Economic Development in Milan and its metropolitan area. Vodafone 5G network has already achieved coverage of 80 percent of Milan and targeting 80 percent 5G coverage in its metropolitan area by December 2018.
2. Telecom Italia (TIM) has obtained 5G frequencies for an 80MHz block of 3700 MHz for 1,694 million euros and a 200MHz block of 26 GHz for 33 million euros.
In addition to the two blocks of 700 MHz, TIM’s total investment in the 5G spectrum auction will be 2,407 million euros.
“The switch on of the antenna in Bari certifies TIM’s technological primacy in 5G space in Italy,” Amos Genish said.
Investment in 5G network is an important part of the TIM strategy for sprucing up revenue in Italy. TIM’s telecom business in Italy has posted 7.454 billion euros in revenue in the first half of 2018 against 7.494 billion euros in the same period 2017.
TIM 5G will be focusing on both consumer and business customers. Consumer business of TIM’s telecom business in Italy has reported 3.753 billion euros in revenue, while 2.333 billion euros came from business customers and 860 million euros from wholesale business in Italy.
TIM will use 3700 MHz and 26 GHz to leverage the testing already underway in Turin, Bari and Matera and in the Republic of San Marino.
TIM has started to implement services for the Smart City targeting public security, transport, environmental monitoring, healthcare, tourism and culture, in San Marino.
The 3700 MHz band, already used for the tests launched at the start of the year, is available immediately.
TIM will use 26 GHz millimetre wave band, which will be available from 2019, to conduct road test for the first 5G services. TIM will use the 700 MHz frequencies, available from 2022, to strengthen UBB coverage, including in indoor areas, with the implementation of 5G technology.
TIM said its 4G mobile broadband coverage reached over 98 percent of the population in Italy and fixed broadband reached 80 percent of homes via FTTC and FTTH technology.