Five operators participating in Italy's auction of 5G spectrum have submitted initial bids worth about €2.48 billion (US$2.9 billion), according to a government statement, meeting the country's target for proceeds even before a subsequent round.

The bids came from Telecom Italia, Vodafone Italy, Wind Tre, Iliad (Euronext: ILD) and Fastweb SpA (Milan: FWB) and are a sign of keen interest in the airwaves that will be used to support next-generation 5G technology, which promises faster connections and greater efficiency than today's 4G networks.

Authorities had reserved a swathe of spectrum in the 700MHz band for Iliad, the country's newest operator, which paid about €676 million ($782 million) for the license.

Italian broadband operators Linkem and Open Fiber, a government-backed wholesale venture, had also registered to participate in the auction, but neither submitted bids. (See Seven Bidders Register for Italy 5G Auction.)

Under the auction rules, operators will be able to increase their bids during the next phase of the process on September 13. Italy's Ministry of Economic Development, which published the update on its website, has yet to provide more specific details of the bids from each of the participating operators.

Even so, the update is welcome news for Italian authorities after some telcos had previously voiced misgivings about the auction rules and the high base prices attached to spectrum licenses.

In July, Telecom Italia (TIM) warned investors the cost of participating in a 5G auction might force it to sell assets. It has already confirmed the sale of a majority stake in Persidera, an Italian broadcaster.

Along with Vodafone Italy and Wind Tre, the Italian incumbent has come under pressure from the launch of a low-cost mobile service by Iliad in May, although Telecom Italia appears to have coped better than its rivals.

Headquartered in France, where it has a long-established presence in the fixed and mobile telecom sectors, Iliad has managed to sign up more than 2 million Italian customers since May. Both Vodafone and Wind Tre have blamed disappointing quarterly results on the impact of Iliad. (See Iliad Grabs 1M Customers by Day 50 of Italian Odyssey.)

What are the key technologies and processes that will underpin successful, full 5G deployments? Check out our 5G Big Picture Prime Reading report to find out.

Italy's 5G auction includes 75MHz of spectrum in the 700MHz band, 200MHz at 3.6-3.8GHz and another 1GHz in the 26.5-27.5GHz range. Reports have indicated that two 80MHz and 20MHz licenses will be sold in the 3.6-3.8GHz bands, with the 26.5-27.5GHz range divided into five 200MHz blocks.

The lower-band airwaves typically provide much better in-building and wide-area coverage, while higher frequencies can support the very fastest connections. Because of its propagation qualities, the sub-GHz spectrum has tended to attract higher valuations in previous spectrum auctions.

However, the 5G auctions that have already taken place in Europe have generated lower proceeds on a per-MHz-per-capita basis than older 3G and 4G sales. (See The Great 5G Spectrum Devaluation.)

In Spain, authorities raised about €438 million ($507 million) from selling 3.6-3.8GHz spectrum, while a UK auction generated roughly £1.15 billion ($1.5 billion) from licenses in the 3.4GHz band. (See UK's £1.4B '5G' auction looks bad for industry and Spanish 5G Auction Nets €438M for Govt.)

Italy's auction looks different because it includes the 700MHz spectrum band, which has already been sold in some other European markets. The higher number of bidders than in other auctions could also drive up spectrum costs.

Analysts at New Street Research expect the Italian 5G auction to raise nearly €3 billion ($3.9 billion), according to press reports.

— Iain Morris, International Editor, Light Reading