Italy is edging closer to finalizing a EUR 1.5 billion agreement with SpaceX to secure advanced telecommunications services for government and military use.
The five-year contract, under review since mid-2023, includes encrypted phone and internet communications and has gained traction following Prime Minister Giorgia Meloni’s visit to President-elect Donald Trump. Reports indicate the project has the support of Italy’s Intelligence Services and Defence Ministry, though the deal remains pending.
Also Read: BT in Discussion with Starlink About Connecting Hard-to-Reach Enterprises
Concerns from Local Operators
The proposed partnership has drawn criticism from Assetel, a lobbying group for domestic telecom providers. The group argues that SpaceX’s direct-to-consumer Starlink model bypasses existing regulations and poses a competitive threat to local operators struggling with mounting debt and shrinking revenues.
Telecom Italia S.p.A., for example, reported EUR 8 billion in net debt by late 2024 despite selling its network to KKR & Co. for EUR 22 billion. Vodafone Italia, recently acquired by Swisscom AG for EUR 8 billion, reported a EUR 739 million loss in the six months ending September 2024. Assetel has also raised concerns about data sovereignty, urging the government to ensure sensitive data remains stored within Italy.
Related: How Sateliot Plans to Transform Satellite IoT with New Funding
Starlink: A Solution to Broadband Delays
The Italian government views Starlink as a critical tool to address delays in its broadband rollout, a key component of the EU-funded Recovery and Resilience Facility (RRF). With only a third of the 3.4 million buildings targeted under the EUR 3.4 billion plan connected, local operators like Open Fiber and FiberCorp have fallen behind schedule.
Cabinet Under-Secretary, Alessio Butti, highlighted that SpaceX has the potential to accelerate the process, helping Italy meet EU connectivity goals and maximize its share of EUR 194.4 billion in recovery loans and grants. As the country faces economic hurdles, including a debt-to-GDP ratio of 137% (as of mid-2024), innovative solutions like Starlink are crucial for progress.
SpaceX continues to expand globally, recently completing the first orbital shell for its satellite-to-cellphone internet service with the launch of 20 new satellites in December, 2024. Starlink boasts 6,700 active satellites and over four million customers in over 100 countries, including 55,000 in Italy.
If finalized, the SpaceX deal would mark a transformative step for Italy, enhancing secure communications and addressing connectivity gaps that have hindered its economic and technological growth.
