Italy is weighing the possibility of extending 5G licenses while capping costs for operators in return for firm investment commitments, a government undersecretary said, as the telecommunications sector grapples with declining revenues and shrinking margins.
Telecom operators have been lobbying for a free extension of their decade-long licenses after Italy raised EUR6.5 billion in a fiercely contested 5G mobile auction in 2018.
"Renewal cannot be automatic, but for months you've known that I am one of the staunchest supporters of a policy that avoids a cash-driven approach in favor of clear, ironclad investment commitments," said Alessio Butti, undersecretary to the presidency of the council, speaking at the national telecommunications forum organized by Asstel in Rome.
Italian telecom operators are expected to ramp up spending in the coming years to upgrade their 5G mobile networks, delivering higher speeds and enabling a wide range of AI applications for businesses.
Butti said the government is working on several options that will be discussed with Agcom, the national telecommunications regulatory authority.
"The 2018 auction was disastrous, with operators caught in a bidding spiral. As a result, they were left without resources to invest," said Butti, who oversees innovation and digital transformation policies.
According to Asstel data, the revenues of Italian telecom operators have dropped by nearly a third since 2010, while cash generation after investments has plummeted to zero from EUR10.5 billion that year.
(Translated by Anna Uras, editing by Claudia Cristoferi)
