Italy Mulls Picking Telecom Italia, Leonardo for Cloud Hub

(Bloomberg) -- Italy is leaning toward choosing ex-telecommunications monopoly Telecom Italia SpA and defense specialist Leonardo SpA among its main partners for a new national cloud-services hub, as the government looks for ways to keep public administration data out of foreign hands, people familiar with the matter said. 

State-backed lender Cassa Depositi e Prestiti SpA is in talks with the two companies to create an entity that would serve in an intermediary role for managing data with U.S. tech Behemoths like Alphabet Inc.’s Google, Amazon.com Inc., and Microsoft Corp., according to the people, who asked not to be named because the discussions aren’t public. 

A final decision has not been taken yet, and other partners are expected to join the selection process.

Leonardo is partly owned by Italy’s Finance Ministry, while Cassa Depositi has a minority stake in Telecom Italia. The structure of the cloud entity would allow Italy to keep public control over sensitive data.

“Let’s see which proposals will land. There is a certain preference to keep state control,” Technology Minister Vittorio Colao said during a press conference Tuesday in Rome. “At the beginning, we will be our own clients.”

Colao, a former chief executive officer of Vodafone Group PLC, said the project’s value is 1.9 billion euros ($2.3 billion) and added that the allocation process is due to be completed by year-end.

Under the project, Telecom Italia would offer network services and data centers, while Leonardo would handle cybersecurity services, the people said.

Sogei SpA, the Finance Ministry’s in-house tech company, will likely be the third main partner, the people said. Cassa Depositi, Leonardo and Sogei would jointly control the new entity under the plan, which is expected to be reviewed by the government as soon as the end of September.

Representatives for Telecom Italia, Leonardo and Sogei declined to comment.

The cloud-services hub project is a bold attempt by Premier Mario Draghi to gain autonomy over data storage, which is mostly dominated by global tech giants. 

The push from Rome comes in the wake of the U.S.’s 2018 Cloud Act, which allows Washington to request data from companies based in North America even if the information is stored overseas. 

Telecom Italia Chief Executive Officer Luigi Gubitosi said last week that the the phone carrier was poised to join the bidding process for the cloud-services hub. 

Italy is planning to use European Union funds for an overhaul of its telecommunications infrastructure, earmarking 6.7 billion euros for ultra-broadband, including 1 billion euros for developing 5G services.

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