Italy’s mobile operators turn to network sharing to manage 5G costs

Rising costs and falling returns are forcing mobile operators to rethink how they build and run networks. Pressure in Italy is pushing competitors toward cooperation, as the economics of 5G make it harder to justify going it alone.

Telecom Italia and Fastweb, the Italian unit of Swisscom, are close to finalising a mobile network-sharing agreement aimed at cutting the cost of upgrading and operating 5G infrastructure. People familiar with the discussions say the deal is designed to support the shift to standalone 5G, while easing the financial strain that has built up in the sector.

Italy’s mobile operators have seen revenues fall by almost a third since 2010, according to industry group Asstel. Over the same period, post-investment cash flow has dropped to zero from around €10.5 billion. Price competition has remained intense, with large data plans selling for under €10 a month, leaving little room to recover the heavy costs of spectrum and network upgrades.

When 5G economics stop working

The proposed agreement reflects how those pressures are shaping infrastructure strategy. Rather than duplicate spending, Fastweb and Telecom Italia would share active network elements like antennas, base stations, radio units, and backhaul. The project, known internally as Prism, would focus on towns with fewer than 35,000 residents, where returns on new investment are often weakest.

People close to the talks say the arrangement could save each operator between €250 million and €300 million over a ten-year period. Those savings would come from spreading upgrade costs in a shared grid, while still allowing each company to operate independently at the service level. The plan is expected to include spectrum sharing, though assets and supplier contracts would remain separate for now.

If completed, the deal would mark a revival of active network-sharing plans first explored years ago. Telecom Italia and Vodafone agreed to a similar approach after merging their passive mobile assets into tower company INWIT in 2019, but that plan was never put into practice. Fastweb’s involvement reflects how market positions have shifted since then, particularly after its €8 billion acquisition of Vodafone’s Italian business last year.

Sharing networks to preserve competition

Under the current proposal, each operator would take responsibility for upgrading technology in designated areas. The aim is to avoid overlapping investments while keeping day-to-day management clear. By the end of 2028, the shared network is expected to cover around 15,500 sites, according to people familiar with the plans.

For operators, the logic is straightforward. Standalone 5G promises lower latency and better support for enterprise use cases, but it requires fresh investment rather than incremental upgrades to existing 4G systems. In markets like Italy, where pricing limits returns, sharing infrastructure becomes one of the few ways to make those upgrades viable.

Analysts see this as part of a broader shift in European telecoms. In its 2026 outlook, JPMorgan described Italy as one of the cheapest mobile markets in Europe, a factor that continues to cap profitability. Operators are still dealing with the cost of spectrum licences bought during a fiercely competitive 2018 auction, when companies spent a combined €6.5 billion to secure airwaves.

Asstel has since been lobbying regulators to renew spectrum licences, arguing that long licence terms are needed to support investment. Network sharing fits into that wider discussion, raising questions about how regulators balance competition with the need for sustainable infrastructure.

For enterprise customers, the immediate impact may be subtle. Network sharing does not change who sells services or manages customer relationships. Over time, though, it could influence coverage quality, rollout speed, and the economics behind advanced 5G features. In rural and smaller urban areas, shared networks may be the only practical route to extending standalone 5G beyond major cities.

The talks between Telecom Italia and Fastweb are not yet public, and both companies have declined to comment. People involved say the aim is to finalise an agreement by early March. Whether or not that timeline holds, the direction of travel is clear. As margins stay under pressure, cooperation on infrastructure is becoming less of an exception and more of a working model for keeping mobile networks viable.

Rather than signalling a retreat from competition, the move highlights how competition is being reshaped. In markets where price wars have run for years, operators are separating what they can share from where they still need to differentiate. For Italy’s telecom sector, network sharing is emerging as a practical response to hard limits on cost, capital, and growth.

(Photo by Josh Withers)

See also: 5G network strategies diverge: Inside AT&T, Verizon, and T-Mobile’s different technology bets

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Tags: 5G, connectivity, europe, network operations, networks, regulation, telecoms