Iliad chips away at Italian mobile market as 700 MHz opens up

Iliad now has 9 million customers in Italy and certainly has reason to celebrate, with the latest regulatory figures showing that it is continuing to eat away at its rivals’ markets shares.

Meanwhile, Italy’s TV broadcasters have freed up the 700 MHz spectrum band on schedule, which means the telcos are set to begin the next stage of 5G rollout.

Iliad disrupted the Italian mobile market when it launched as the country’s fourth mobile network operator in May 2018, bringing low-cost plans and a period of intense price competition that is still being felt by the longer-established players there. Just over four years later and it has signed up 9 million customers. That’s a decent start in a market with a population of around 60 million.

“At the core of the operator’s ongoing growth trend is trust,” Iliad said, as it announced its new customer milestone. That’s customer trust in Iliad’s transparency and commitment to retain its low-cost pricing plans, the telco explains.

We’ll gloss over Iliad’s recent spat with the Italian regulator that led to it being fined for misleading customers with its 5G marketing…

You could argue that low prices, rather than trust, are at the heart of Iliad’s continued growth. But the telco says it has a customer satisfaction score of over 97%, according to a recent Ipsos survey, which puts it several percentage points ahead of TIM, Vodafone and WindTre. And furthermore, its increasing market share suggests it is retaining customers as well as simply drawing them in.

The latest figures from the Autorità per le Garanzie nelle Comunicazioni (Agcom) put Iliad’s share of the Italian mobile market at 10.9% at the end of 2021, an increase of 1.6 percentage points on end-2020. That’s the market for human SIMs, incidentally, and does not include IoT and M2M. The other three network operators all reported slight declines in market share – percentage point drops ranging from 0.7 to 1.2 – and although they remain significantly larger than Iliad, the relative newcomer is chipping away at their market.

Three of the four Italian MNOs, Iliad included, are about to enter a new phase of network development in Italy.

Reports in the local press in recent days reminded us that 1 July marked the official date for the handover of 700 MHz spectrum to the mobile industry, or rather the date by which Italy’s TV broadcasters were required to clear the frequencies. According to Mondo Mobile Web, amongst others, the airwaves have been cleared and are ready for use by the mobile operators.

It is almost four years since TIM, Vodafone and Iliad together spent €2 billion on 700 MHz frequencies for 5G (time really does fly when you’re writing about telecoms.) All three committed similar sums for paired 10 MHz licences. Iliad picked up frequencies reserved for a market newcomer at a price of €676.5 million, while TIM and Vodafone agreed to part with €680.2 million and €683.2 million respectively, via auction.

At the time, operators both in and out of Italy were grumbling about the cost of 5G, including TIM, which was making noises about having to sell assets to afford the rollout. They have since launched 5G services and now have the chance to boost their offerings by adding in those 700 MHz frequencies.

But talk of reshaping the business has not gone away for the incumbent. Quite the opposite, in fact. In the intervening years TIM has merged its towers business with that of Vodafone Italia, sold off shares, and is working on the disposal of much of the remainder. Meanwhile, a well-documented business separation is on the cards, the telco having decided to split its networks and services units. The latest on that is we’re probably looking at a roughly 50:50 split of employees and debt between the two operations, according to Reuters’ sources, that is.

Meanwhile, TIM also has a finger in the pie of the Italia 1 Giga project, having shared the spoils of €3.4 billion worth of government funding for the rollout of high-speed fixed broadband with rival – and would-be new network partner – Open Fiber. The project, part of the country’s EU-backed Covid recovery scheme, has since been completed, with TIM picking up €65 million of funding for the final unallocated lot covering Trento and Bolzano, Vittorio Colao’s Ministry for Technological Innovation and Digital Transition (MITD) revealed last week.

With a takeover offer or two on the table and the need to compete on all fronts, the incumbent is certainly busy. But it also needs to keep an eye on the likes of Iliad, whose continuous healthy growth rate remains an issue for all of the big three MNOs.

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