The European Commission (EC) approved an Italian government programme to allocate €2 billion for expansion of 5G and fibre networks in the country as part of a post-Covid-19 (coronavirus) economic and social recovery plan.

Italy’s scheme had to be signed-off by the EC due to the cash coming from the European Union’s (EU) Recovery and Resilience Facility, which provides grants and loans to member states.

The funding is set to cover expansion of next generation networks into underserved areas, providing a boost for consumers and businesses in those parts of the country.

In a statement announcing its blessing, EC EVP in charge of competition policy Margrethe Vestager said the support would contribute to “economic growth of the country and to the EU’s strategic objectives relating to the digital transition”.

The EC noted the proposal was “necessary and proportionate to address market failures, namely the absence of current or planned mobile networks that would adequately address end-users’ needs”.

Cash will be allocated as direct grants to CSPs to finance infrastructure including backhaul and base stations to deliver a minimum 5G service level of 150Mb/s download and 30Mb/s up.

On originally announcing the scheme, Italian authorities imposed a deadline of 27 April on bids for the funding with an obligation to complete related work by end-June 2026. Public funding is set to cover up to 90 per cent of costs.