Italy Telecom Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The Italian telecom market is expected to register a CAGR of 1.3% over the next five years. Key telecom companies, such as TIM, Vodafone, Wind Tre, Cellnex, and Fastweb, are based in Italy and promote innovation by making significant R&D investments consistently.

Key Highlights

• The growing demand for high-speed connectivity services by customers and increasing spending on the deployment of 5G infrastructure has a positive influence on the growth of the Italian telecom market. For instance, TIM expanded its 5G network, now available in Bari and Padua, and 16 new locations across the country. It offers 5G services with downloading speeds of up to 2 Gbps.
• The transition from 4G to 5G is still rising in the country due to expanding new networks and the expansion of the device ecosystem. The government plans to deploy 5G networks across the country. For instance, Telecom Italia (TIM) won a government contract worth EUR 725 million (USD 756 million) to deploy 5G networks in rural areas of Italy.
• In the future, all the customers will slowly migrate from 3G and 4G networks to the 5G network. For instance, Wind Tre and Ericsson have signed a long-term 5G agreement. The deal is to power its 5G Standalone (SA) network with a dual-mode 5G Core on cloud infrastructure.
• Growing demand for fixed broadband services will significantly create new growth opportunities for the telecom market. For instance, in October 2022, Open Fiber signed an agreement with EOLO (Equal Opportunity Lifestyle Organization) to provide fixed broadband service in rural areas.
• Due to the COVID-19 pandemic, a large portion of the Italian population was forced to at home constantly. Many people opt to work from home, due to which there is increased broadband consumption. Offering high-speed broadband services will further support the growth of the telecom market.

Italy Telecom Market Trends

Rising Demand for Fixed Broadband Services

• Key players in the market are deploying high-speed broadband services in the country. The government has forward-looking plans to expand its broadband coverage to support 3G, 4G, and 5G networks.
• For instance, in August this year, Fastweb expanded its 5G Fixed Wireless Access (FWA) network to more than 1,000 municipalities across the country. Services are available at download rates of up to 1 Gbps using a 26 GHz spectrum and up to 100 Mbps using 3.5 GHz band equipment. The continued expansion of 5G networks and 5G services across the country will increase 5G adoption and provide opportunities for telecom players to offer 5G FWA services.
• The Italian telecom market made further strides in expanding its network capacity with fiber cable-based broadband deployments. For instance, in May this year, FiberCop and Open Fiber won a government tender worth USD 3.63 billion; the tender is expected to be completed by the end of 2026. Through this contract, they offer fixed broadband connectivity services of at least 1 Gbps/200 Mbps (download/upload) to 7 million households in underserved areas (rural areas).
• According to Ookla Speedtest Global Index, Italy ranked 70th with a median fixed broadband download speed of 54.22 Mbps in September this year. The demand for fixed broadband services is growing significantly, creating new growth opportunities for the telecom market.

Rising Demand for OTT and PayTv Services

• The revenue from Pay-TV services is likely to drop over the next five years because of a steady decline in DTH subscriptions and emerging competition from OTT service providers.
• Increasing mobile subscribers will significantly increase the demand for OTT (over-the-top) services. OTT service providers, such as Netflix, Disney+, and Amazon Prime, offer on-demand videos for customers, thus creating new growth opportunities for the telecom market.
• According to Ookla Speedtest Global Index, Italy ranked 48th with a median mobile download speed of 40.62 Mbps in September this year. OTT services will further increase mobile data consumption.
• According to GSMA, smartphone adoption in the country was 77% last year, and it is expected to reach 81% in 2025. Adults in the country are increasingly using smartphones. The smartphone penetration will further increase the demand for OTT services.
• During the COVID-19 outbreak, people adopted work-from-home practices and spent more time watching videos, games, and other forms of entertainment at home. OTT service providers offering on-demand videos will further drive the growth of the Italian telecom market.

Italy Telecom Market Competitor Analysis

The Italian telecom market is moderately fragmented due to ongoing partnerships and recent advancements in the market. Some major players in the market studied include TIM, Vodafone, Wind Tre, Cellnex, and Fastweb.

In October 2022, Telecom Italia (TIM) launched its first commercial 10 Gbps fixed broadband service in 33 cities. These new fixed broadband services will be able to offer services for 1.2 million premises.

In October 2022, Vodafone introduced its fixed wireless access (FWA) services for home users. This 5G FWA service provides download rates of up to 300 Mbps.

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