No company applies for the € 1 billion 5G Broadband GPA with PNRR funds

The sector players judge that the business plan is too uncertain

The sector player of 5G and broadband think that the investment plan is unsustainable even with a public contribution that can reach up to 90% of the required investment.

One of the two tenders for 5G networks financed by the National Recovery and Resilience Plan (PNRR) was deserted: no offers have been received for the six lots that had their deadline fixed on May 9th. The tender launched by INFRATEL, the in-house company of the Ministry of Economic Development, to cover "market failure" areas, also called white areas, with 5G telephone service. The maximum amount of the government’s contribution was fixed in € 974 million, to be subsidize up to 90% of the required private investment.

The telecommunications operators abandoned the idea of participating after elaborating a series of budget simulations of the investment, which proved to be too demanding to go to cover peripheral areas of the country, from which it would have been difficult to obtain revenues and profits capable of to balance the costs.

The Ministry of Technological Innovation and Digital Transition, which coordinates the ultra-broadband strategy financed with the PNRR, believes that it has offered favorable conditions, after having agreed with the European Commission an extremely high limit for public incentives (90 % precisely). Now the ministry should start discussions with the European Commission to verify the possibility of moving unused resources to other projects or purposes, but there is also the possibility that unused PNRR funds will remain in the EU's availability.

Among the possible alternative destinations, it could be evaluated the possibility to increase the prices for the other tenders relating to the ultra-broadband or (but it is much more complicated) or the confirmation of the purpose, i.e. 5G coverage, but with direct intervention by the State instead of using the public contribution. The tender could be related to the construction of a new infrastructure network to provide mobile services with transmission speeds of at least 150 megabits per second in the downlink and 30 megabits per second in the uplink. Anyhow, offers were received for all the 6 lots into which the other PNRR tender for 5G was divided, with a maximum contribution of 948.8 million and relating to infrastructures and related equipment for fiber optic connections (backhauling) of approximately 11 thousand mobile radio sites. The award of these tenders is expected by June, as it will be for the tenders relating to optical fiber coverage and Fwa technology in the grey areas of the country, those with partial competition, and those involving schools and health facilities. Overall, however, according to the Ministry of Technological Innovation, Mr. Vittorio Colao, the balance is positive: «We are satisfied with the result obtained in the tenders and we want to thank the operators and Infratel contracting authority for the great effort of these months. At the moment we have received offers for 37 lots while the tender is still underway for a further lot ". As for 5G, he adds, 6 lots have not received offers “despite the fact that the Government has made the best possible effort to cover the digital divide in the most remote areas. For the amount related to this part of the tender, in the next few weeks different use of the funds and timing will be evaluated ".

INFRATEL (in-house company of the Ministry of Economic Development)- https://www.infratelitalia.it/

Contacts: https://www.infratelitalia.it/contatti