Wednesday 18 November 2020

Competition and Customer Expectations are Heating up with 5G Launches in Italy

Italy has a large and vibrant mobile market with one of the highest mobile penetration rates in Europe which has benefitted from progressive government programs aimed at developing the fibre broadband sector.  However the number of subscribers has fallen in recent years as customers respond to attractive off-net pricing which has reduced the financial benefit of having SIM cards from different providers. 

The market underwent considerable changes following the merger of Wind and 3 Italia (becoming Wind Tre), which resulted in a new entrant in the form of Iliad. In mid-2019 Fastweb was recognised as an MNO in its own right, having been an MVNO for some 11 years. The company has secured spectrum in the 3.5GHz and 26GHz bands and has a ten-year deal with Wind Tre providing it with national roaming as well as a partner with which to develop a 5G network.

Italian network operators were among the first in Europe to trial services based on 5G. Recent spectrum auctions raised €6.55 billion, a cost which has encouraged operators to looking at cost-saving options including network build cooperation and the sale of base station portfolios.

There are four network providers currently operating in Italy, with one merger and one new entrant: TIM, Vodafone, W3 (WINDTRE) (merger of Wind and 3) and Iliad (launched in 2018). 

2G is still operational up to EDGE on 900, 1800 MHz spectrum is being reused for LTE 3G: up to DC-HSPA+ is on 900 (Band 8) and 2100 MHz (Band 1). 4G/LTE : 800 MHz (band 20), 1800 MHz (band 3), 2600 MHz (band 7). Additionally TIM is using the unusual 1500 MHz (band 32) in metro areas and Tre is testing TD-LTE on 2600 MHz (band 38). Vodafone has started to deploy LTE also on 2100 MHz (band 1) in large cities.

5G was started in 2019 on the major networks on 3500 MHz (n78) in a few cities, but only TIM and Vodafone are selling it so far, and only Vodafone sells it without requiring a link to an Italian bank account or credit card. For 5G there will be two physical networks: one built by TIM and Vodafone and a second one built by FastWeb and WindTre.

TIM and Vodafone used to have the best coverage. This has changed in 2020 when the newly consolidated network WindTre was unveiled and seems to be now on par with the other carriers what coverage and speeds are concerned. The new 4th operator Iliad has deployed some own 3G/4G infrastructure and relies on a 10 year- RAN-sharing and roaming contract with WindTre giving it a reasonable nationwide coverage at the start.

The recent Open Signal report observes that regarding speed it was something of a two-horse race between TIM and Vodafone, which were the only Italian operators to win any of their national awards since November 2016. But now the newly merged WindTre has joined the race and is overshadowing the former leader TIM. Vodafone jumped to the lead winning three awards and tying for a further one; WindTre gained two first prizes and drew for two additional awards; TIM drew with WindTre in Video Experience to jointly win one award this time.

Vodafone and TIM are not resting idly and have been given conditional approval by the European Commission to create Europe's biggest mobile towers company as part of a strategy to speed up the rollout of 5G services.

Also according to Open Signal the COVID-19 pandemic showed an impact on Italy's mobile network experience similarly to many other countries around the world. But the good news is that, regardless of the incremental challenges due to managing increased load on the networks, Italian smartphone users generally saw their mobile experience improve across all metrics except for Download Speed Experience compared to six months ago. In fact, users on TIM and Vodafone’s networks saw their average download speeds decline. But this is not breaking news because six months ago they observed a similar decline with both TIM and Vodafone seeing speeds fall compared to May 2019. Despite a few drops in download speeds, Italian operators have so far shown a resilient mobile experience in this unprecedented situation, improving most of their scores across the Open Signal metrics.

In this report, data has been gathered and analysed in the 90 days from the start of February 2020 to compare the mobile network experience of Italy's four national operators: Iliad, TIM, Vodafone and the newly-merged WindTre that originated from the former Wind and 3 Italia. Along with the national-level awards and analysis, they have also looked at the performance of all four operators in 21 of Italy's biggest cities to see how they compare.

TIM owned by Telecom Italia is still the biggest operator in the country. All of the country is covered by 2G, 97% of the population is covered by 3G and 4G/LTE is available in 6,300 municipalities covering 94% of the population: TIM 4G coverage. From 2017 the rather unusual band 32 on 1500 MHz was added for LTE aggregation in Turin, Milan, Rome, Naples, Palermo, Taormina and Giardini-Naxos.

Telecom Italia (TIM) had previously announced that it expects to provide 5G technology in at least 120 cities and 200 tourist destinations across Italy by 2021. By that time TIM also plans to provide 5G coverage for 245 industrial districts and 200 specific projects for big businesses.

The carrier initially launched 5G services in parts of Turin, Rome and Naples in July 2019. TIM’s 5G offering was also expected to cover Milan, Bologna, Verona, Florence, Matera and Bari by the end of 2019. The telco also announced plans to cover 30 tourist destinations throughout Italy, 50 industrial districts and complete 30 dedicated 5G projects for large companies by December 2019.

The operator said that the speed of the 5G service will be increasing progressively up to 10 Gbps by 2021. TIM previously said that its 5G services will be offered through spectrum in the 700 MHz, 3.6-3.8 GHz and 26.5-27.5 GHz bands.

In this initial phase TIM is deploying Ericsson’s 3GPP standards-based Non-Standalone 5G portfolio from Ericsson Radio System, supported through a software upgrade of their existing 5G Core network.

Vodafone is Italy's 2nd network and according to tests it has surpassed TIM both in 4G/5G speeds and coverage. 4G/LTE covers 98% of the population in 2019 and is included in most of their prepaid plans: Vodafone 4G map.

Vodafone was the first operator to offer commercial 5G services in Italy. The operator launched the technology in five cities across the country in June 2019.nInitially, the 5G service was available in Milan, Turin, Bologna, Rome and Naples. The company used equipment from Nokia and Huawei for the deployment of commercial 5G.

At the time of the launch, Vodafone Italy said it expects to add around 45 to 50 cities to 5G coverage during 2020. Aldo Bisio, Vodafone Italy’s CEO said that the telco’s 5G technology will reach more than 100 Italian cities by 2021.

In 2017 WindTre was born. This newly merged company has 27 million mobile customers. In 2018 Hutchison (former owner of Tre) took over the rest of the company and bought out Veon (former owner of Wind). For the time being both brands were sold separately.

Meanwhile the newly combined network scored many points in network tests and seems to be on par with TIM and Vodafone now. Both Umlaut and OpenSignal found out in 2020 that W3 4G coverage is equal to the other two networks and average speeds are even slightly higher at 28.6 Mbit/s.

Finally, as of 16 March 2020 the new brand and logo W3 (called: WindTre) was introduced and both brands have now merged commercially.

In June 2019 Wind Tre and Fastweb announced a strategic agreement leveraging on the operators’ respective assets in order to accelerate the rollout of a nationwide 5G network.​ The agreement will lead to the rapid deployment of a shared 5G radio access and back-hauling network in Italy that will support the delivery of next-generation mobile services for Fastweb and Wind Tre customers.

The shared 5G network will include Wind Tre and Fastweb macro and small cells, connected through dark fiber from Fastweb, to be deployed nationwide, with a targeted coverage of 90% of the population by 2026. Under the terms of the deal, Wind Tre will manage the 5G network, while both operators will remain independent in the commercial and operational use of the shared infrastructure.

Iliad by the French operator that offers 'Free mobile' in France has acquired the 4th licence as network operator in Italy after the merger of Tre and Wind. They employ national roaming and RAN-sharing in 2G/3G and 4G/LTE with WindTre after sealing a contract for 10 years (In non merged areas only WindTre network is used).

The new network was commercially launched in 2018. Because of the agreement with WinTre coverage is nationwide and equal to Wind or Tre and their signal might be shown as '222-50'. It's expected that the highly competitive market in Italy will be again heated up by their low-cost model.

Their introductory offer in May 2018 shook the industry. Like in France they don't offer regular prepaid plans, but only rolling contracts, that can be terminated at the end of each month. In summer 2018 they signed two million users within three months alone targeting a 10% share of the Italian market later.

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