The Italian government is advancing negotiations for a €1.5 billion telecommunications security services contract with SpaceX, aimed at enhancing the security of telephone and internet communications for the government and military.
This move comes after a visit by Prime Minister Giorgia Meloni to President-elect Donald Trump in Florida, with discussions reportedly gaining momentum due to Elon Musk’s backing of Trump.
The five-year contract, which has been under review since mid-2023, has faced resistance from local telecommunication providers. These services, proposed by SpaceX, may include encryption for sensitive communications, but have raised concerns among Italian telecom operators, such as Assetel, the lobbying group for local providers.
Assetel has called for a review of regulations for low-orbit satellite broadband services, particularly SpaceX’s Starlink, which sells devices directly to consumers and competes with domestic telecom operators. The group also urged the government to impose rules mandating that sensitive data be stored within Italy’s borders.
The project has reportedly received approval from Italy’s Intelligence Services and Ministry of Defence. However, local telecom providers are already struggling with debt and declining revenues. Telecom Italia SpA, for example, reported €8 billion in net debt, even after selling its network to US private equity firm KKR & Co. in a €22 billion government-backed deal.
In December, Swisscom AG completed an €8 billion acquisition of Vodafone Italia, which had faced financial difficulties, including a €739 million after-tax loss for the six months ending in September. The growing tension between local providers and international players like SpaceX continues to shape Italy’s telecommunications landscape.
