The Italian government is negotiating with Elon Musk's SpaceX company to conclude a €1.5 billion deal to provide telecommunications security services. This was reported by Euronews, according to UNN.
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Following a meeting between Italian Prime Minister Giorgi Meloni and US President-elect Donald Trump, some progress has reportedly been made in concluding a deal with SpaceX.
Despite the fact that the five-year contract has not yet been signed, Trump's support for Musk may speed up the process. In addition, the project was approved by the Italian intelligence services and the Ministry of Defense.
The services offered by SpaceX may include encryption of telephone and Internet communications used by the Italian government and military. Work on the deal has been underway since mid-2023, but difficulties have arisen due to opposition from local telecommunications providers.
For example, the lobbying group Assetel has called for a review of the rules governing broadband satellite operations in low earth orbit. They expressed concern about SpaceX's business model, which involves selling consumer devices directly to customers.
The company also emphasized that Starlink's services directly compete with local telecom operators and called on the government to introduce rules requiring confidential data to be kept inside the country.
Telecom operators in Italy have faced rising debts and declining revenues due to intense price competition. For example, in the third quarter, Telecom Italia SpA reported net debt of EUR 8 billion even after the sale of its network to the US private equity firm KKR & Co.
In December, Swisscom AG acquired Vodafone Italia, which had been facing persistent financial problems, for €8 billion. In September, Vodafone reported a loss of €739 million.