The Italian government is currently negotiating a significant telecommunications security services contract with SpaceX, valued at €1.5 billion. This potential partnership may bring advanced encryption services for telephone and internet communications to be used by the military and government of Italy. As of mid-2023, the deal is still under evaluation but has encountered resistance from local telecommunications providers.
This development comes on the heels of Prime Minister Giorgia Meloni’s recent meetings with President-elect Donald Trump in Florida, as reported. Although the five-year contract has yet to be finalized, Elon Musk’s association with Trump could potentially expedite discussions. Reports indicate that the Intelligence Services and Defense Ministry of Italy have given their preliminary approval for this initiative.
Challenges from Local Telecommunication Providers
In November, the lobby group Assetel raised concerns about the regulatory framework surrounding low-orbit satellite broadband operations, specifically targeting SpaceX’s business model, which sells consumer devices directly to customers. This approach could potentially sidestep traditional regulations, creating further competition with local telecom companies.
Assetel voiced strong resistance to Starlink’s services, arguing that they directly compete with local telecom operators. The group also urged the Italian government to implement regulations that would mandate the storage of sensitive data within the country. Italy’s telecom sector currently grapples with significant financial pressures, experiencing debt levels and shrinking revenues due to fierce pricing wars. Notably, Telecom Italia SpA reported €8 billion in net debt in the third quarter.
In a similar vein, Swisscom AG completed its acquisition of Vodafone Italia for €8 billion, following Vodafone’s struggles in the Italian market, which resulted in a staggering after-tax loss of €739 million for the six months ending in September.
Italy’s Commitment to EU Broadband Goals
The Italian government is exploring innovative strategies to support local industries in achieving broadband network objectives outlined in the European Union’s Recovery Plan. With a government debt-to-GDP ratio of 137% recorded at the close of Q2 2024, Italy stands to gain €194.4 billion in loans and grants from the Recovery and Resilience Facility (RRF) by 2026. Nevertheless, the country is lagging behind in utilizing the €113.5 billion in recovery funds already secured, as economic conditions threaten to hinder its growth targets.
The broadband initiative forms a critical aspect of the infrastructure investment plan aimed at stimulating Italy’s economy. Reports from November indicate that the government, led by under-secretary Alessio Butti, is considering the use of Starlink services to mitigate delays caused by companies charged with implementing Italy’s high-speed internet rollout.
Currently, local telecom operators, including Open Fiber and FiberCorp, have achieved connectivity in just a third of the 3.4 million buildings targeted by the ambitious €3.4 billion plan.
SpaceX’s Expanding Global Influence
In December, SpaceX announced the launch of 20 new Starlink satellites, completing its first orbital shell for a groundbreaking satellite-to-cellphone internet service. In 2024, the company expanded its Starlink services to over 20 new nations and now boasts 6,700 active satellites orbiting the Earth. With more than four million customers in over 100 countries utilizing its broadband services, Starlink has become a major player in global telecommunications. In Italy alone, approximately 55,000 customers benefit from SpaceX’s services, supported by a network of 7,000 satellites.
Photo credit & article inspired by: Euronews
