Italy's Struggling Wind Tre Eyes 5G Rollout in Late 2019

Iain Morris
11/16/2018
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Italy's Wind Tre expects to bring commercial 5G networks into parts of the country in late 2019 as it tries to bounce back from customer losses and delays to a network project this year.

Benoit Hanssen, the operator's chief technology officer, told a conference in Italy that he expects the "first parts of the country" to see 5G deployment by the end of next year.

But he warned attendees at ZTE's Wireless User Congress that 5G-enabled smartphones might not be available to the mass market until 2020 or 2021 and would probably not be ubiquitous until 2027.

That suggests Wind Tre might initially use 5G technology to support fixed wireless broadband services for residential customers.

Open Fiber, a state-backed wholesale operator that counts Wind Tre as a customer, this week flagged interest in using 5G for residential broadband services in areas it cannot easily cover with high-speed fixed lines.

"When you go low density it is not economical, and so in those areas we choose to have a fixed wireless access [FWA] offer," said Stefano Paggi, Open Fiber's chief technology officer, at the ZTE customer event in L'Aquila, Italy. "We believe 5G could be, for these areas, another important technology we could use with frequencies we do not own at the moment."

Open Fiber is already collaborating with Wind Tre on 5G trials and under a formal 5G partnership could take advantage of 5G spectrum Wind Tre secured during Italy's recent €6.6 billion ($7.5 billion) auction. (See Italy's $7.6B 5G Bonanza Puts Telcos on the Rack.)

Wind Tre is under renewed pressure to find commercial partners in the Italian mobile market following reports this week that Telecom Italia (TIM) and Vodafone Italy plan to pool their 5G assets.

Owned by Hong Kong's CK Hutchison, it has suffered badly this year due largely to competition from Iliad, a new entrant that introduced a low-cost mobile service in May and had captured as many as 2.2 million customers by the end of September. (See Wind Tre: The New Weakling of Italian Mobile and Iliad Grabs 1M Customers by Day 50 of Italian Odyssey.)

Wind Tre has yet to report results for its third quarter but lost about 600,000 customers between March and June and saw revenues plummet a tenth for the first half, to about €2.77 billion ($3.16 billion), compared with the year-earlier period.

The operator blamed the setbacks partly on ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), its main network vendor, which was unable to carry out planned work after US authorities banned it from buying US-made components for part of the year. (See ZTE Ban & Iliad Entry Blow Wind Tre Off Course and Amid the Rubble of L'Aquila, ZTE Tries to Rebuild.)

Wind Tre's response was to reduce the scope of ZTE's contract and introduce Sweden's Ericsson AB (Nasdaq: ERIC) as a second supplier.


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Created from a merger between 3 Italia and Wind Telecommunicazioni, Wind Tre is trying to merge and modernize those companies' separate networks.

While Hanssen said the modernization is now about 50% complete -- up from 35% at the end of June -- he does not expect work to be finished until the end of next year.

The outcome of the 5G auction is a further concern for Wind Tre's investors: The operator failed to secure any 700MHz spectrum and picked up just 20MHz in the all-important 3.7GHz range. Telecom Italia and Vodafone each have 80MHz in that band, giving them a big advantage in the future 5G market.

Like its rivals, Wind Tre also bought 200MHz in the 26GHz band, which could be especially valuable in the context of residential fixed wireless broadband services.

Nevertheless, with little immediate prospect of sales growth from 5G services, analysts are worried that telcos overpaid for spectrum in the Italian auction, which raised more than 2.5 times what the Italian government had expected.

"Our choice to stay away from the auction was right given the amount spent on the frequencies," said Open Fiber's Paggi.

— Iain Morris, International Editor, Light Reading

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