Italian telcos fined for pricing collusion

Telecom Italia, Fastweb, Vodafone and Wind Tre have been fined a total of €228 million after an investigation found the four telcos had co-ordinated price hikes for consumers in 2017.

The complaints against the four telcos had been raised by Iliad, a fifth service provider in the market, as well as Onlus CODES Association and Altroconsumo, two consumer rights groups. The investigation has now been formally concluded with Telecom Italia taking a €114 million fine, Vodafone €60 million, Wind Tre €39 million and Fastweb €14 million.

Telcos are of course allowed to raise prices as they see fit, though when it is done in such a collective manner to prevent churn and competition, regulatory authorities will become nervous.

In this case, the Italian Competition Authority (AGCM) found the telcos aligned their commercial activities which violates item 137 of the Italian consumer code, though it is somewhat of a complicated story.

The Italian telco decided to move from a monthly billing cycle to a 28-day one in 2017, though as the prices were not decreased during this transition. Consumer and advocacy protests focused on the 8.6% price hike which would be experience over the course of the year, as the telcos were effectively creating a thirteenth billing month.

In 2018, the telcos decided to pivot back to the monthly billing standard, though there would be a price increase to compensate for the shift. The consumers were back to square one but were paying more for the pleasure.

The AGCM has now concluded the co-ordination between the telcos allowed each to keep the inflated tariffs, made it unnecessarily difficult to compare tariffs and unfairly prevented the consumer from searching for a better deal.

While it is very difficult to 100% guarantee the consumer will be safeguarded from underhanded and nefarious corporate practices, the AGCM is at least dishing out fines which will make a material impact on the spreadsheets. The telcos will of course be able to afford these fines, but the amount will certainly make them think twice about trying this sort of thing again.

Iliad calls on courts to block Wind Tre and Fastweb sharing deal

Wind Tre and Fastweb have been attempting to take network sharing in Italy to a new level in recent months, but once again, Iliad has its objections.

While there will always be objections to network sharing agreements from some corners of the telecoms industry, Iliad is making a habit of it. As the only telco without a partnership to share communications infrastructure, the Italian disruptor is seemingly attempting to make sure it isn’t left on its lonesome.

According to Reuters, Iliad has submitted documents to an Italian court seemingly in an attempt to obstruct the partnership between Wind Tre and Fastweb. A first hearing will take place on February 12 to access whether Iliad should have access to the deed, though this follows objections made by to Italian courts for a similar deal between Vodafone and Telcom Italia.

The agreement between Wind Tre and Fastweb was originally signed in June 2019. The pair would deploy a shared 5G radio access and back-hauling network across Italy, and also Wind Tre and Fastweb macro and small cells, connected through dark fibre from Fastweb. The aim is to cover 90% of the Italian population with 5G connectivity by 2026.

Wind Tre will also provide Fastweb roaming services on its existing mobile network, while Fastweb will provide Wind Tre wholesale access to its FTTH and FTTC network. It is a very complementary deal for the pair, with the opportunity to realise genuine cost savings when looking forward at 5G.

However, Iliad seems to want to put a stopper on the partnership before it gets going in earnest. This is not the first time it has rejected the network sharing momentum in the country either.

The European Commission is also investigating whether plans to merge Telecom Italia and Vodafone Italia tower assets into a single operating company violate antitrust laws. Iliad has reportedly complained about this deal to regulators also. A decision on this dispute is set to be given on February 21.

The tie-up between Telecom Italia and Vodafone Italia is built along similar lines to the Wind Tre and Fastweb partnership. Firstly, the tower assets of both companies would be merged within telco neutral infrastructure company INWIT, with each telco taking a 37.5% stake. The next stage would be sharing active infrastructure, testing first on the existing 4G network with the intentions of realising efficiencies on 5G deployment plans.

But perhaps the most interesting aspect of both these partnerships is the validation of network slicing. While other agreements have focused on the passive infrastructure, this extends the sharing model to active equipment. Both of these parties would effectively be running virtualised networks over the shared infrastructure, a major validation of network slicing if it works.

This is the sort of partnership which telcos will be very keen to see work, while network infrastructure vendors will pray to see fail. Validation of network slicing could revolutionise the way in which rural networks are deployed and managed, allowing consolidation of CAPEX between national telcos through a single point for both passive and active infrastructure. It could drastically reduce overbuild and save the industry billions.

“Completion of this transaction is key for the country’s infrastructure and technological development and will enable us to further accelerate the deployment of 5G, with Italy already among the countries taking a lead in trials of this new technology,” TIM CEO Luigi Gubitosi said at the time.

Despite the clear benefits of network sharing agreements, there are still concerns in the industry. Regulators are worried over the impact of competition, most notably as to whether non-participants in the sharing trusts will be squeezed out of the market. One means to counter this would be to have an independent or nationalised wholesale party, with all mobile service providers effectively becoming MVNOs, but it is highly unlikely telcos would want to move in this direction, effectively diluting their influence on the industry.

That said, the industry is gradually heading that direction as telcos search for funds to fuel the 5G expansion.

Infrastructure companies such as Cellnex are hoovering up passive infrastructure assets across the European continent, while infrastructure investment funds are also seeking out deals. In both of these instances, the acquirers recognise the telcos need money desperately; there are good value acquisitions to be made for those who have a long-term view on ROI in the passive infrastructure game.

The next step is network slicing, which will be taken forward during with 3GPP’s Release 16. Should network slicing be validated, it will only be a matter of time before owners of passive infrastructure start to put their own active infrastructure on the assets and sell slices to the mobile service providers. It certainly won’t happen overnight, but it is a very feasible outcome.

The telecoms industry is at somewhat of a crossroads. 5G is on the horizon, and the realities of funding this expansion are hitting home. The telcos have seen revenues eroded over the last decade but are now being asked to underwrite the most expensive infrastructure project to date. The equation is not balanced, so new ideas are needed.

Italy is a country which is perhaps under more pressure than most. Aside from the drastic reduction in pricing thanks to the introduction of the disruptive Iliad, few spectrum auctions have pushed the financial capabilities of telcos as much as the Italian’s. This is a market which is under pressure.

Network sharing agreements, both passive and active infrastructure, are interesting ways to generate more with less, though it does appear Iliad will attempt to derail progress. As the mobile player in the country without a deal, it does appear the firm fears being squeezed out of the market.

Interestingly enough, the question remains whether authorities will care? If Fastweb is to introduce its own mobile products, Italy would have four mobile service providers fuelled by the efficiencies of network sharing agreements. This might be deemed sufficient competition in the market, therefore the needs of Iliad might be sacrificed in pursuit of benefits for the greater good.

BICS and Fastweb combine to link Europe and MEA

Connectivity vendor BICS has joined forces with Italian operator Fastweb to augment communications links between Europe, the Middle East and Africa.

The strategic partnership aims to combine BICS’ pan-European network with Fastweb’s fibre backbone in Italy and its access to submarine cable systems originating in Sicily. The point of this joint effort is to offer intercontinental connectivity services wholesale to other operators.

“We are highly satisfied with this partnership agreement with such a major international player as BICS, which highlights the strength of our network and the solid nature of our strategy,” said Fabrizio Casati, Chief Wholesale Officer at Fastweb. “The partnership with BICS adds further value to our investments, following on from our participation in the Open Hub Med consortium in Sicily and the development of an innovative and future-proof Flexible Optical Network all along Italy.”

“BICS has always been committed to providing its customers with first-class connectivity, and this partnership confirms our position as a bridging partner for operators expanding their capacity provision throughout Europe,” said Daniel Kurgan, CEO at BICS.

In case you’re wondering where else BICS connects here are a couple of maps for you. We couldn’t find any for Fastweb, sorry.

BICS Europe

BICS global

The BariMatera5G project seeks to exemplify the potential of 5G

A collaboration between TIM, Huawei and Fastweb to create one of the first 5G antennas is designed to show why it’s worth the effort.

The BariMatera5G project is a high-profile piece of 5G virtue-signaling by these three tech players. It has left the lab and officially hit the airwaves today with some kind of symbolic switch having been flicked, no doubt. As a result the Italian cities of Bari and Matera will be among the first in Europe to live the 5G dream, or at least be ready for it once devices turn up.

The precise aim of the project is to use the 3.7-3.8 GHz band to achieve 75% coverage of the two cities’ testing area by 2018. The testing has already hit 3 Gbps in the field, we’re told, but it’s about a lot more than just enhanced mobile broadband, which is just as well as merely a step up in speeds-and-feeds is unlikely to be enough to make 5G a success.

The slide below from the latest presentation about the project is a good summary of the various moving parts that full-fat 5G will consist of. The afore-mentioned tests also achieved 2 ms latency, which corresponds with the low-latency network slice (uRLLC) and the third cardinal slice is massive machine-type communication (mMTC), which is geek-talk for IoT and  will be represented at a technological level primarily by NB-IoT.

This project seems to have established itself sufficiently that is reasonable to expect it to be an exemplar for early 5G and what it promises for a while yet. It’s also good to see at least some parts of Europe having a good go at keeping up with China and the US in the 5G race.

BariMatera5G network slide

Huawei claims 5G data connection first in Turin

Huawei teamed up with TIM and Fastweb to test 5G data connections over the 3.6-3.8 GHz spectrum band in Italy.

These trials are part of a state sponsored initiative promoted by the Italian Economic Development Ministry (MISE), labelled Project Bari Matera after the first two locations to benefit from it. This initiative is considered to be at the vanguard of European 5G development and was frequently referred to by Qualcomm at its 5G event last week.

The significance of this test seems to be that it was the first data connection tested on an end-to-end 5G network, including the terminal, the New Radio access and the core network. As ever 5G NR USPs such as speed, latency and efficiency were the focus and they managed to his 3 Gbps, 2.6 ms latency and a spectral efficiency of (30 b/s)/Hz, all of which are much better than LTE.

That’s about it for now, since nearly all of the material being circulated about this trial is in Italian. There isn’t even a canned quote, you’ll be devastated to hear, but if there was it would almost certainly make reference to how excited all the participants are and how the trial reflects on their general superiority at everything.