According to Assinform (the Italian IT association) data, the value of Italy's digital market has fallen to €65.162 billion – 4.4% lower than in 2012 – indicating a downturn that contrasts with the 3.8% increase seen in the global digital market (valued at nearly $4.38 trillion). This figure is in keeping with the recent trend (from 2009 to 2012 the average annual decrease was 1.8%). Unfortunately, the figure has been dragged down by the performance of the telecommunications sector. Hampered by price wars and regulatory decisions (eg, the cut in mobile terminations), in one year the severe difficulties faced by telecommunications network services have caused the sector to lose over 10 percentage points. In particular, this sharp drop in network services is the combined result of a drastic reduction in tariffs and the natural decline in voice services and – above all – text messages, as they are increasingly replaced by data transmissions and messaging apps. Consequently, value added mobile services have risen by 25.1% (€1.12 billion), driven by the spread of tablets and smartphones.

A breakdown by macro area reveals the following statistics:

  • Devices and systems generated business of nearly €16.89 billion (a 2.3% decrease from 2012).
  • Software and information and communications technology (ICT) solutions posted a 2.7% gain, with a total value of €5.475 billion.
  • A 2.7% decrease was recorded in ICT services, which did not exceed €10.245 billion.
  • Telecommunications network services recorded business of €24.94 billion (a 10.2% decrease).
  • Digital content and digital advertising – the most encouraging figure – rose by 5.6% to 7.613 billion.

On previewing Assinform's annual report, outgoing Chairman Elio Catania, who was recently appointed head of Confindustria Digitale, commented:

"If Italy could match European levels, the Italian GDP [gross domestic product] could increase by one point a year and even more. There needs to be greater awareness of the fact that ICT is a strategic resource for the country's economy."

Italy therefore needs to change gear and focus on immediate new investments in a sector which – on the basis of achievements in other countries – could gain GDP points. The report highlights the impact of digital investments on GDP. The EU average stands at 6.5%; in Italy it does not exceed 4.8%, compared with 6.8% in Germany, 7% in France and 9.6% in the United Kingdom. Catania specifically emphasised that "those two percentage points of gap with the European average mean an investment gap in the region of €25 billion".

In order to implement a new investment-orientated strategy, it is important to focus attention on the Digital Italy Plan. A great deal of progress has been made by recent governments, especially with the establishment of the digital agenda (for further details please see "Pressing ahead with the digital agenda"). However, now is the time to take action – "from agenda to implementation, also by maximising public-private partnerships on the infrastructural investments front", as Catania proposes.

For further information on this topic please contact Vittorio Noseda or Carlo Grignani at NCTM Studio Legale Associato by telephone (+39 02 72 5511), fax (+39 02 72 55 1501) or email (v.noseda@nctm.it or carlo.grignani@nctm.it). The NCTM Studio Legale Associato website can be accessed at www.nctm.it.