MILAN, May 23 (Reuters) - Italy's communications regulator AGCOM said on Wednesday the government would auction frequencies for fifth-generation mobile services in September, in a move it expects to raise at least 2.5 billion euros ($2.9 billion) for state coffers.
The watchdog, which set out the rules governing the auction, said half of the 2.5 billion euros would be raised this year, adding the industry ministry would be organising the auction.
The rules represent the first step for the roll-out of 5G services, which promises to deliver ultra-fast internet connections to Italian homes and businesses.
Italy, which ranks 25 out of 28 in this year's Digital economy and society index (Desi) of EU member states, is the first country in Europe to set the rules for assigning frequencies in a 5G auction.
In Germany final auction conditions will be made available by the end of the year and the auction itself is expected to be held early 2019. Under a 2016 plan, the European Union wants to deploy 5G for all urban areas and major terrestrial roads by 2025.
Italy's main telecom operators, including Telecom Italia (TIM), Vodafone Italia, Wind-Tre and Fastweb are expected to join the auction.
In its statement on Wednesday, AGCOM said the rules would help the development of a series of new players including pure infrastructure operators.
Open Fiber, controlled by utility Enel and state lender CDP, is currently building a fiber optic network to offer fast broadband services to telecom operators, in direct competition to TIM.
5G services need fiber optics to work properly since copper networks would not be fast enough to support the next generation mobile phone technology.
$1 = 0.8550 euros Reporting by Stephen Jewkes, writing by Stefano Rebaudo