SpaceX’s proposed services could include encryption of telephone and internet communications used by the Italian government and military, but it has faced opposition from local telecommunications providers.
The Italian Government is advancing in negotiations for an agreement on telecommunications security services 1.5 billion euros with SpaceXby Elon Musk. The news comes after Prime Minister Giorgia Meloni’s visit to President-elect Donald Trump in Florida, according to ‘Bloomberg’.
Although the five-year contract it hasn’t closed yetMusk’s endorsement of Trump may accelerate talks between the parties. The Italian Intelligence Services and the Ministry of Defense would have approved the project.
SpaceX’s proposed services could include encryption of telephone and internet communications used by the Italian government and military. The agreement is He has been studying since mid-2023but has faced opposition from local telecommunications providers.
Local rivals oppose the deal
In November, the lobby group Assetel requested a review of the regulations that regulate operations satellite broadband in low orbit. The group expressed concern about SpaceX’s business model, which involves selling consumer devices directly to customers, potentially circumventing existing regulations.
Assetel also highlighted that Starlink services compete directly with telecommunications operators and urged the Government to impose regulations requiring sensitive data to be stored in the country.
Italian telecommunications operators have had to face increasing debt and declining income due to intense price competition. For example, Telecom Italia SpA declared net debt (after leases) of €8 billion in the third quarter, even after selling its network to U.S. private equity firm KKR & Co. in a government-backed deal and valued at 22,000 million euros.
For its part, Swisscom AG completed in December the acquisition of Vodafone Italy for 8 billion euros, while Vodafone’s Italian division faced continued financial problems. Vodafone recorded a loss of 739 million euros after taxes in the half-year ended in September.
Italy faces challenges to meet EU-funded industrial targets
The Italian Government has been studying ways to support local industry to meet broadband network goals set in the Recovery Plan financed by the European Union.
At the end of the second quarter of 2024, Italy had the second highest ratio of public debt to GDP, at 137%. The country is due to receive €194.4 billion in cheap loans and grants from the Recovery and Reactivation Facility (MRF) by 2026. However, Italy is delayed in spending the 113.5 billion euros of recovery funds already guaranteed, as the economy is expected to lose traction to meet its growth objective.
The broadband network project is a key component of the spending plan in infrastructure designed to boost the Italian economy. In November, Reuters reported that Italian Undersecretary of the Cabinet Alessio Butti revealed that the government was considering using Starlink to offset delays accumulated by companies in charge of Italy’s high-speed internet rollout program.
Currently, local telecommunications operators, including Open Fiber and its rival FiberCorpthey have only wired about a third of the 3.4 million buildings targeted by the €3.4 billion plan.
SpaceX’s growing global presence
In December, SpaceX, Elon Muskannounced that it had launched 20 new Starlink satellites, thus completing the first orbit of its innovative satellite internet service to mobile phones.
The aerospace company added more than 20 nations to its internet services by Starlink satellite in 2024. Starlink has 6,700 active satellites orbiting the Earth, with more than four million customers using its broadband services in more than 100 countries around the world. Italy currently has about 55,000 customers, served by 7,000 SpaceX satellites.
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