Italy is the world's sixth largest
industrialized economy and the Italian ICT market represents
approximately 9% share of the total European market. The size and
importance of the Italian economy are often not fully appreciated by
American exporters. The market is far from being mature in many
segments, and the potential for American ICT exports to Italy is still
significant.
Italy is also
Europe’s third largest market for the communications equipment and
services industry, as well as the second largest and most advanced
mobile communications market in western Europe.
Mobile
phone diffusion in Italy is among the highest in the world, with over
91 million SIM cards activated (with multiple-SIM ownership) and 23
million of them enabling UMTS services. Clients served number more than
46 million, about three quarters of the total population.
Despite its magnitude, the Italian ICT market does still suffer from
long-existing structural problems and is undersized and lags behind in
comparison with the other major European countries. The technology gap
is still significant, although ICT penetration is improving.
Italy also lags behind other major European countries in regard to
Internet usage, but the market has experienced significant growth in
recent years with an estimated number of 32 million users in 2009.
Italian users are relatively less mature in the use of this medium with
respect to the European average, although they are catching up.
Broadband access is developing steadily, although at a lower rate than
the European average, with 12.5 million users at the end of 2009 (+9.2%
over 2008). xDSL dominates the market and is utilized in over 97% of
cases, while fiber optics represents only 3%.
Italy is
in urgent need of an ultra high-speed Next Generation Network (NGN).
Italy's government and regulator Agcom have repeatedly called for a
common effort by Italy's telecoms operators to boost broadband
investment in the country. While the Italian government has committed to
NGN investments of $1 billion in the next three years, incumbent
operator Telecom Italia SpA, which owns the existing fixed-line network,
is not willing to share control of its key copper and broadband
infrastructure with other operators. The company has announced its own
investments for $9.7 billion for network infrastructure and information
technology, plus an additional $8.3 billion by 2016, with the aim of
offering ultra broadband services to 50% of the Italian population by
2018 through a 1OO megabit fiber optic infrastructure.
On the other hand, Italy's main alternative telecom operators (Fastweb,
Wind and the local subsidiary of Vodafone) have recently presented to
the European Union a joint Fiber-to-the-Home (FTTH) project aimed at
boosting the country's broadband infrastructure by replacing the
traditional copper network with a broadband fiber network. The project
will involve a total investment of about $3.5 billion during the first
five years and should provide high-speed services to 15 major Italian
cities and 10 million people. A second phase calls for an investment of
$11.8 billion, which should provide services to cities with more than
20,000 inhabitants, thus reaching 50% of the Italian population. The
project will also be open to other telecom operators and the three
providers have asked the Italian Government to trigger the process for
the creation of a “fiber company.”
The WiMAX license
auction, which in February 2008 assigned the right to utilize 3.5GHz
frequencies to a number of operators, also represents an important tool
for increasing competition on the broadband market and for reducing the
digital divide in rural or underserved areas.
With
regard to ICT market results, while some signs of recovery have
manifested themselves towards the end of the year and in the first
quarter of 2010, trade figures indicate that, overall, 2009 was the
worst year since 1991 for the Italian ICT market. According to
ASSINFORM, the major Italian Association of Information and
Communications Technology companies, in 2009 the Italian ICT market was
worth $86 billion, an aggregate decrease of 4.2% in Euro currency over
the previous year, with IT registering an 8.1% decrease, and the
telecommunications market a 2.3% decrease.
The
hesitancy of larger companies to invest in new ICT projects, the severe
cutback of ICT budgets in the public administration at the central level
and in several companies active in formerly leading sectors, SME’s
difficulty accessing financing all negatively impacted market growth in
2009. It is anticipated that these factors will continue to have some
repercussions through, at least, the second semester of 2010.
On the positive side, Italian companies employing 50 to 250 employees
are expected to continue to represent the most dynamic segment, as they
are investing in ICT innovation with the aim of increasing their
productivity and competitiveness in both the local and global markets,
thus reducing the digital divide with larger companies. In addition,
ASSINFORM has recently reached an agreement with two major Italian banks
to provide favourable financing terms of $1.2 billion to Italian
companies wishing to invest in new IT projects.
The
Italian Government is committed to modernizing the country through the
development of policies which will accelerate widespread acceptance and
use of new information and communication technologies, both in the
public and private sectors. It is also fostering a “new ICT economy”
business culture by offering grants to small and medium size
enterprises. Among the most recent programs is the “Industry 2015”
innovation program for the adoption of advanced IT solutions in “Made in
Italy” sectors, which provides grants of $280 million to companies and
research centers.
By Nicoletta Postiglione
