5G regulation and law in Italy

5G is already deployed in the densest parts of main cities, but structural barriers still limit its expansion in the countryside. Five communications operators are offering 5G services: TIM, Vodafone, WindTre, Iliad and Fastweb.

As of 31 December 2022:

• TIM's 5G network is reported to be available in 555 locations across the country.
• Vodafone has activated 5G in roughly 70 cities.
• Fastweb says on its website that its 5G network covers 18 major cities. The operator has committed to reaching 90% of the population by 2025.
• WindTre announced that 65.4% of the population is covered by 5G.
• Iliad claimed that more than 3,000 cities are served by its 5G network.

Some operators have specific 5G offers with fixed monthly fees that are different to 4G plans. Other companies (such as Fastweb) offer 4G and 5G connection at the same price.

According to a study issued by the 5G & Beyond Observatory of the School of Management at the Politecnico of Milan (the “Observatory”), 122 5G projects are in the trial phase, some via public grants.

The projects relate to:

1. remote monitoring (35% of projects) in smart cities (mobility management systems, smart parking, intelligent lighting and intelligent bins for waste collection), agriculture (managing crops and receiving alerts), health (telemedicine tools to maintain patients’ vital signs), and transport (facilitating predictive maintenance across large distributed infrastructures such as railways, monitoring with sensors and drones);
2. improving user experience (20%) with applications for tourism, media and education;
3. security and video-surveillance (16%), connected cars (9%), improvements in connectivity (2%), and autonomous driving (2%).

Moreover, the Observatory has identified eight industrial sectors that will benefit (or are already benefiting) from 5G's innovation boost: utility/energy, automotive/mobility, logistics, retail, healthcare, manufacturing, agriculture, media & entertainment, and security.

Recently, EXOR International (producer of digital platforms for the industrial sector, specialising in Industrial IoT and Edge computing solutions) launched with TIM Italy’s first 5G-connected factory. This was possible thanks to a private network developed by TIM, which uses the frequencies 3.7 GHz and 26GHz. EXOR International also uses Intel artificial intelligence technology and has a 5G laboratory, which enables customer manufacturing companies to test their own applications in a private network, integrating them with existing solutions.

TIM and Inwit will participate in the EU-funded 5G-CARMEN project, which provides a cooperative, connected and automated mobility (CCAM) platform leveraging 5G technology to enable vehicles to exchange speed, position, intended trajectories and manoeuvres by exploring distributed and centralised approaches for cooperative lane merging. Extensive cross-border trials will take place in the Bologna to Munich corridor that connects Bavaria, Tirol and Trentino/South-Tyrol.

In mid-2022, Ericsson, TIM and Comau launched a project to develop innovative solutions for Industry 4.0 and smart manufacturing by leveraging 5G. In particular, Ericsson and TIM deployed a 5G network in Comau’s Turin headquarters, which has launched three new industrial applications. The initiative is part of the EU-funded 5Growth project (5G-enabled Growth in Vertical Industries), which aims to develop 5G solutions for major industry verticals such as Industry 4.0, transportation, and energy through a field-based-trial approach.

The 5G auction began in 2018.

The tender rules aimed to ensure broad access to spectrum:

1. the frequencies were divided into blocks, with capping mechanisms to limit the spectrum each operator could obtain;
2. some blocks were reserved for new entrants, and went to Iliad, which entered the market in 2018;
3. licensees had certain obligations to grant other companies access to their 5G network.

In 2021 the government assigned EUR 2.02bn from the Italian Recovery and Resilience Plan to the application of the “5G Italy” Plan. Under the Plan, the aid will take the form of direct grants to electronic communications services providers. The measure will finance the deployment of (i) high-performing backhaul networks to connect mobile base stations that by 2026 will not have a high-performing one; and (ii)  base stations to provide 5G mobile services at speeds of at least 150 Mbps download and 30 Mbps upload in areas that by 2026 will not be served by networks with download speeds more than 30 Mbps.

Over 40 hospitals have signed an agreement with tower operator Inwit to provide DAS (Distributed Antenna System) microantenna coverage that is fully compatible with the 5G network.

In 2022, Inwit installed the same infrastructure in the new Milan metro line (Line M4) for 4G and 5G connection to Vodafone and TIM users.

In 2020 TIM and Ericsson launched 5G connected technologies at the Leonardo da Vinci Fiumicino Airport in Rome.

The 5G auction began in 2018.

The tender rules aimed to ensure broad access to spectrum:

1. the frequencies were divided into blocks, with capping mechanisms to limit the spectrum each operator could obtain;
2. some blocks were reserved for new entrants, and went to Iliad, which entered the market in 2018;
3. licensees had certain obligations to grant other companies access to their 5G network.

The public tender began in mid-September and ended on 2 October 2018, with the awarding decision published seven days later.

The Ministry of Economic Development (MISE) awarded licences in the following bands: 700 (694-790) MHz, 3700 (3600-3800) MHz and 26 (26.5-27.5) GHz. The winning operators were: Telecom Italia, Vodafone Italia, Iliad, Wind Tre and Fastweb.

The frequencies were made available from 1 January 2019 for the 3700 MHz and 26 GHz, and from 1 July 2022 for the 700 MHz frequency. The usage rights will terminate on 31 December 2037.

Participants provided a technical report indicating which services and technology they intended to implement, in line with the tender conditions and licensee obligations.

Each frequency block had a reserve price, in order to achieve the minimum target set by the budget law (EUR 2.5bn). The blocks were awarded to the highest bidders after 14 days of competitive bidding.

The main obligations are: (a) spectrum usage; (b) coverage; and (c) access.

Participants accepted an obligation to use the awarded frequencies in the 700 MHz SDL, 3600-3800 MHz and 26 GHz bands within strict timelines: 24 months from receiving the right of use, or from the nominal availability of the frequencies, if later, in the 3600-3800 MHz, 36 months in the 700MHz SDL band, and within 48 months in the 26 GHz band. Within these timelines, they must install the broadband or ultra-wide radio network and use the assigned frequencies, in all provinces.

The 700 MHz spectrum raised EUR 2.04bn. Telecom Italia paid EUR 680.2m for 2×10 MHz. Illiad spent EUR 676.5m for 2×10 MHz. Vodafone spent EUR 683.2m for 2×10 MHz.

The 3600-3800 MHz frequencies raised EUR 4.3bn, with an average price for the frequencies of 18 cEUR/MHz/PoP/10 years.

The price for the 26 GHz frequencies was much lower, raising a total of EUR 167.3m.

According to a recent study conducted by Bank of Italy researchers (“Connected Italy”, by Emanuela Ciapanna and Giacomo Roma, downloadable at https://www.bancaditalia.it/pubblicazioni/qef/2020-0573/QEF_573_20.pdf), after adjusting the data to the population (and therefore to the different market sizes), the unit price per MHz recorded in Italy was twice that of Germany, three times that of the UK, and four times more than Spain.

There has not been an announcement on future tenders.

The 5G-specific rules are set out in the AGCOM (Italian Communication Authority) Resolution 231/18/CONS and the MISE tender rules.

During 2022, there were delays to 5G implementation in rural areas (so-called 'White Areas'). An initial call for tenders in the first half of 2022 went ignored, and no bids were submitted. The tender was subsequently awarded at the end of June 2022.

No decision was issued regarding the non-compliance with 5G concession obligations.

To guarantee broad domestic 5G coverage, the tender rules ask licensees to cooperate. In fact, the 700Mhz spectrum holders are jointly bound to reach 99.4% of the population, within 54 months of receipt and on terms agreed among the assignees. Within 14 months of receipt, they must jointly agree on which tools will verify implementation. They must submit their plan to the Ministry of Economic Development and AGCOM, and then update it annually. Failure to do so could result in their losing spectrum rights, with no reimbursement. The tender rules identify certain extra-urban areas in which each assignee must provide roaming services, frequency pooling, technical characteristics and locations to the others based on reciprocity principles, in order to guarantee a seamless service. These areas include crucial national networks for road, rail and maritime transport. 

The government is supporting 5G infrastructure sharing in order to develop the network in rural areas. In this perspective, on 16 March 2020, Infratel (an in-house company of the MISE) and 5G operator Linkem signed an agreement to test the potential to integrate Linkem's 5G FWA infrastructure with the fibre-optic infrastructure that Infratel offers to telecom operators.

There are several network sharing agreements:

TIM/Vodafone

TIM and Vodafone’s agreement is via the integration of their respective tower companies, Inwit and Vodafone Towers. These have been integrated into Inwit, which will rent space mainly to telecommunication operators. Inwit is now jointly controlled by TIM and Vodafone, which each own a 37.5% share. To secure the European Commission's approval (announced 6 March 2020), the operators offered the following commitments:

Inwit will make available, on reasonable and non-discriminatory terms and in accordance with a specific timetable, free space on 4,000 towers in municipalities with more than 35,000 inhabitants, for third parties to install, operate, maintain and use equipment to provide current and future fixed wireless and mobile telecommunications services;

Inwit will publicise which towers are available;

Inwit will respond in a timely fashion to third party requests for tower access, and may only refuse to provide space for technical reasons, explaining these in writing;

In the event of access disputes, a fast-track resolution mechanism will enable an independent expert to adjudicate; and
Inwit, TIM and Vodafone will not exercise any early termination rights on existing hosting contracts and framework agreements, and will offer to extend these.

The Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision was conditional upon full compliance with the commitments.

Fastweb and WindTre

Fastweb and WindTre announced an agreement on 25 June 2019 to deploy a shared 5G radio access and backhaul network to support the delivery of next-generation, high performing mobile services for their customers. The shared network includes their macro and small cells, connected via Fastweb’s dark fibre, with a view to covering 90% of the population by 2026. WindTre manages the 5G network, while both operators remain independent in the commercial and operational use of the shared infrastructure. As part of the agreement, WindTre provides Fastweb with roaming services on WindTre’s existing network, thus allowing Fastweb to extend its mobile coverage. Meanwhile Fastweb provides WindTre wholesale access to Fastweb’s FTTH and FTTC network, improving WindTre’s ultra-broadband connectivity to wireline customers.

WindTre and Iliad

WindTre and Iliad have launched a joint venture company called Zefiro Net which will facilitate infrastructure sharing in rural areas. The announcement comes after the companies received regulatory approval for their plan from AGCOM in August of 2022. WindTre and Iliad will both hold 50% of Zefiro Net’s shares.

There are several network sharing agreements:

TIM/Vodafone

Access obligations vary depending on the frequency band an operator has been awarded:

700 MHz FDD

Operators with spectrum in the 700 MHz FDD band must offer national roaming on their 700, 800 and 900 MHz networks to a new entrant acquiring spectrum in this band for 30 months nationally and 60 months in the areas not covered by the new entrant. The roaming conditions must be fair, non-discriminatory, and transparent. The new entrant has the right to national roaming only if it has launched commercial service and covered at least 10% of the population with its own frequencies.

3600-3.800 MHz

Each winner of at least 80 MHz nationally in the 3600-3800 MHz band (or that reach this amount by adding up frequencies in the lower 3400-3.600 MHz to which they have any right or agreement to use) must provide access to other players not licensed in the bands up to 3800 MHz (or licensees in 3.5 GHz but with frequencies covering less than 40% of the national population), such as other telecom operators or service providers. Access must be provided on the following terms: (a) access is aimed to develop 5G services and be based on a commercial agreement with fair and non-discriminatory conditions; (b) the agreement specifies the area of interest (which does not necessarily include areas where the holder has coverage obligations or in general intends to cover); and (c) if the licensee does not cover the area where a player needs connectivity, the player can deploy the network, upon agreement or by leasing frequencies. This obligation also aims to develop new business cases by exploiting high performance technologies to offer future innovative services.

26 GHz

Access obligations according to the “Club use” model: each licensee can dynamically use all the awarded spectrum (up to 1 GHz) in areas where frequencies are not used by other licensees. To this end, licensees can stipulate commercial reasonable and non-discriminatory agreements, proportionally sharing the costs. Each licence holder has the pre-emptive right to its assigned block (or blocks). Licensees can assign to a trusted third party the task of managing the uses to avoid harmful interference and access scheduling. Moreover, licensees must provide access (wholesale capacity) to other players (non-telco providers) to develop 5G services. There are additional specific access obligations for services in closed areas accessible by the public such as ports, airports, stadiums, arenas, cinemas, theatres, national parks, museums and metros.

To ensure 5G cybersecurity, the government has included 5G technology within the scope of application of its “Golden Power” regime (Law Decree n.21/2012). It also relates to agreements with non-EU entities on:

• the purchase of goods and services relating to the design, implementation, maintenance, and operation of 5G networks; and/or
• the acquisition of related high-tech components.

The law imposes a notification obligation for certain transactions, and the government may use the Golden Power by either imposing mitigation measures or vetoing a transaction if mitigation would not limit risks to the integrity and security of networks and data. According to statutory law, when a Golden Power notification is filed, the National Office for Assessment and Certification (Centro di valutazione e certificazione nazionale – CVCN) will assess possible vulnerability factors that could compromise the integrity and security of 5G networks and data transmitted through a preliminary investigation, which becomes part of the procedure.

With Law Decree No. 21/2022, the government has further expanded the Golden Power rules to strengthen the protections regarding national security in the strategic areas, with particular reference to transactions involving 5G broadband electronic communications services and cloud technology. The Law Decree provides for a prior notification duty to the Office of the Presidency of the Council of Ministries when acquiring goods or services related to the design, realisation, maintenance and management of the relevant activities. Such notification shall include an annual plan (to be updated on a quarterly basis) containing a detailed description – inter alia – of the transaction, the assets and parties involved, the agreements in place and the 5G network business plan. The annual plan is approved (possibly with prescriptions) or rejected within the following 30 days from the date of notification. The Italian Government applied its newly extended Golden Power to the annual plans notified in 2022 by Vodafone, Fastweb, WindTre, Tim, and Linkem. Regarding Vodafone and TIM annual plan, it is important to highlight that the government's interventions targeted the role of the Chinese company Huawei in supplying 5G equipment.

Moreover, the EU NIS Directive, implemented in Italy through Legislative Decree no. 65 of 18 May 2018 and supplemented by the Law Decree 21/2012,has identified public and private national entities and operators which:

1.  exercise an essential function of the state, or ensure the provision of an essential service for the maintenance of social, civil, and economic activities that are fundamental to the interest of the state, and
2. provide these functions or services through critical systems such as information systems and services whose malfunctioning, interruption or improper use could affect national security.

The law identifies a series of requirements and notification duties that operators must meet. These include an obligation to: (i) notify to the Presidency of the Council of Ministers and to the Minister of Economic Development, and subsequently update a list of critical systems used by the operator; (ii) notify any incident having an impact on such critical systems to Italy’s Critical Security Incident Response Team (CSIRT); and (iii) comply with measures to guarantee a high standard of security for critical systems.

The decree also affects suppliers of goods, ICT systems and services to be used on critical systems by requiring operators planning to purchase such goods and services to notify the CVCN. Furthermore, the new legislation introduces a duty of collaboration with the CVCN, which may ask suppliers to meet certain conditions or request hardware and software testing for any risk assessment at their own expense. In this case, any supplier contract must include a condition precedent or a termination clause contingent upon the outcome of any CVCN assessment.