Italy Fetches About $7.5 Billion in 5G Airwaves Auction

(Bloomberg) -- Italy’s auction of fifth-generation mobile spectrum ended Tuesday, fetching about 6.5 billion euros ($7.5 billion) for the country’s cash-strapped populist government, more than twice the target, according to people familiar with the matter.

The auction ended on the 14th day, said the people, who asked not to be identified because the results aren’t public. A Rome-based spokesman for Italy’s development minister declined to comment.

World Record for 5G Auction Is Danger Signal for Phone Companies

Key Insights

• Italian prices per user and MHz for 3.7 GHz spectrum, which works best in built-up areas, broke the previous record from South Korea.
• The country’s main carriers -- Telecom Italia SpA, Vodafone Group Plc, Iliad SA and CK Hutchison Holdings Ltd.’s Italian unit Wind Tre -- have spent two weeks outbidding each other in an auction where key bands of spectrum was relatively limited.
• The spiraling prices for airwaves needed to run 5G services in Italy are a warning light for carriers across Europe as they pile into the new technology. Italy’s biggest phone companies had threatened to boycott the sale because they said the bidding rules were too rigid and the starting price was too high.
• The 5G networks are designed to be denser and more equipment-heavy than current technology and the Italian industry won’t have much extra cash to spend on antennas radio systems once the auction is paid for: the telecom industry body GSMA sees little growth in mobile revenues in most European countries over the next seven years.
• The auction’s record prices are a boon to Italy’s public coffers in a year where investor concerns have centered around the country’s future in the euro area after the Five Star Movement and the League -- two Euroskeptic parties -- formed a coalition government.

Click here to read Alex Webb’s column on Italy’s $7 Billion Cash Grab

©2018 Bloomberg L.P.