The Italian gas distribution sector is highly fragmented, with the top six DSOs representing 70% of the existing 22 million delivery points (DPs). The government has introduced the ATEM concept to consolidate the sector, dividing the Italian territory into 175 ATEMs for the next tenders and defining an ATEM tender calendar. However, few operators are likely to have all of the technical and financial capabilities to be competitive in the upcoming ATEM tenders, with bidders required to manage at least 50% of ATEM DPs to participate. Market share represents one of the main entry barriers for future tenders, with the greater the incumbent's capabilities and willingness to retain the ATEM, the lower the ATEM's contestability. The Italian gas distribution sector is expected to face a new tender season in the coming years, with 20 billion euros in tenders expected to be awarded.
