Siemens Mobility Receives Billion-Euro Order from Italo for Market Entry in Germany

Italo plans to offer long-distance rail services in Germany starting in spring 2028. Initially, two main corridors are planned: an hourly service on the Munich–Frankfurt–Cologne–Dortmund route, and a two-hour interval service between Munich, Berlin, and Hamburg. According to the company, it intends to offer 56 daily train connections with 30 high-speed trains, connecting 18 cities on a network of approximately 1,300 kilometers.

Market Entry via Two Corridors

Italo CEO Gianbattista La Rocca justified the move with the goal of offering passengers in Germany an expanded range of services: „Wir wollen den Fahrgästen in Deutschland eine größere Auswahl, häufigere Verbindungen, faire Preise und einen hochwertigen Service bieten." The company is promoting a concept that envisions higher service frequencies and new direct connections on high-demand corridors.

A prerequisite for market entry is a decision by the Federal Network Agency. Following a complaint by Italo, the Bonn authority ruled that DB InfraGo – the Deutsche Bahn subsidiary responsible for the rail network – must allocate at least one quarter of capacity on heavily utilized routes to competitors in the future. This is intended to create space for new providers, particularly at hubs such as Munich and Frankfurt.

Starting Situation in German Long-Distance Rail

Deutsche Bahn currently controls around 95 percent of the long-distance rail market in Germany, according to industry sources. Alongside Italo, the Munich-based company Flix is the only other notable competitor in long-distance rail. Flix has already announced its own offensive for 2028 with additional trains and new connections. Italo thus enters into direct competition with Deutsche Bahn's ICE trains.

The major order also has implications for analysts' valuation of the Siemens Group. While JPMorgan rated the stock "Overweight" on July 9, 2026, and UBS rated it "Buy" on July 7, 2026, Bernstein Research issued an "Outperform" rating on July 14, 2026. Barclays Capital rated the stock "Underweight" on July 7, 2026, while RBC Capital Markets issued a "Sector Perform" rating on July 3, 2026.

Market Reactions and Risks

Unions, passenger associations, and Deutsche Bahn itself had previously pointed out that an additional competitor on the already overloaded rail network could lead to restrictions in long-distance and regional services. DB InfraGo, as the infrastructure operator, is responsible for allocating the scarce track slots. The Federal Network Agency's decision is therefore likely to further increase the pressure on the company to provide additional capacity.

With the conclusion of the contract, Siemens Mobility is consolidating its position as one of the world's leading manufacturers of high-speed trains. The order from Italy follows a series of comparable orders in Europe and underscores the strategic importance of the Velaro program, which also forms the technological basis for the latest generation of ICE trains.

Overall, it is becoming apparent that the German long-distance rail market will see significantly more competition from 2028 onward. In addition to Deutsche Bahn, Italo, and Flix, other providers could benefit from the Federal Network Agency's modified capacity allocation. It remains to be seen how quickly the necessary additional track slots on the heavily used corridors can actually be made available.