Rising costs and shrinking returns are forcing mobile operators to rethink how they design, build and run networks. In Italy, economic pressure is pushing competitors toward cooperation as the rising costs of deploying and operating 5G make it increasingly difficult to justify going it alone.
Telecom Italia and Fastweb, the Italian unit of Swisscom, are reportedly 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 intended to support the transition to standalone 5G while easing the financial strain that has built up across the sector.
Italy’s mobile operators have seen revenues decline by almost a third since 2010, according to industry group Asstel. Over the same period, post-investment cash flow fell from roughly €10.5 billion to near zero. Price competition has remained intense: large data plans are commonly sold for under €10 a month, leaving little room to recover the heavy costs of spectrum licences and network upgrades.
When 5G economics stop working
That economic reality is shaping infrastructure strategy. Rather than duplicating spending, Fastweb and Telecom Italia plan to share active network elements such as antennas, base stations, radio units and backhaul. Internally known as Project Prism, the collaboration would concentrate initially 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 ten years. Savings would come from spreading upgrade costs across a shared grid while allowing each company to retain independent control at the service level. The plan is expected to include spectrum sharing arrangements, although assets and supplier contracts would remain separate for the time being.
If completed, the deal would revive active network-sharing ideas first explored years ago. Telecom Italia and Vodafone previously discussed a similar approach after consolidating passive mobile assets into tower company INWIT in 2019, but that concept was not fully implemented. Fastweb’s prominent role reflects how market dynamics shifted, particularly after its €8 billion acquisition last year of Vodafone’s Italian operations.
Sharing networks to preserve competition
Under the proposal, each operator would be responsible for upgrading technology in designated areas to avoid overlapping investments and maintain clear day-to-day management lines. By the end of 2028, the shared network is expected to cover roughly 15,500 sites, according to those familiar with the plans.
The logic for operators is straightforward. Standalone 5G delivers lower latency and stronger support for enterprise use cases, but it requires substantial new investment rather than incremental upgrades to existing 4G infrastructure. In price-sensitive markets like Italy, where pricing caps potential returns, sharing infrastructure is one of the few ways to make those investments financially viable.
Analysts view this as part of a broader shift across European telecoms. In its 2026 outlook, JPMorgan described Italy as one of the cheapest mobile markets in Europe, a reality that continues to compress profitability. Operators still face the legacy costs of spectrum licences purchased during a fiercely competitive 2018 auction, when companies spent a combined €6.5 billion to secure airwaves.
Asstel has lobbied regulators to renew spectrum licences with longer terms, arguing that extended licence durations are necessary to support long-term investment. Network sharing enters that regulatory debate, raising questions about how authorities can balance maintaining robust competition with the need to sustain essential infrastructure.
For enterprise and consumer customers, the immediate impact of sharing agreements may be subtle: the arrangement does not change who sells services or manages customer relationships. Over time, however, it could affect coverage quality, rollout speed, and the business case for advanced 5G features. In rural and smaller urban communities, shared networks may present the most practical route for extending standalone 5G beyond major cities.
The discussions between Telecom Italia and Fastweb are not yet public, and both companies have declined to comment. People involved in the talks say the goal is to finalise an agreement by early March. Whether that timeline holds, the direction is clear: with margins remaining under pressure, cooperation on infrastructure is becoming less of an exception and more of a mainstream approach to keeping mobile networks sustainable.
Rather than signalling a retreat from competition, the move underscores how competition is being reshaped. After years of price-driven battles, operators are increasingly separating elements they can share from those they must keep as differentiators. For Italy’s telecom sector, network sharing is emerging as a practical response to constraints on cost, capital and growth.
(Photo by Josh Withers)
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