TIM is bringing 4x4MIMO, carrier aggregation, 256QAM, small cells and cloud architecture to San Marino with a view to start testing 5G technologies within the next year.
The network upgrade will begin by the end of 2017, more than doubling the number of masts in the republic and installing several dozen small cells backhauled by fibre across the country.
In 2018, the Italy-based operator said it would start to trial new frequencies based on the 5G New Radio interface, which will enable wider bandwidths and exceed current LTE performance levels.
The project will focus on millimetre waves and power use cases for self-driving cars, the Internet of Things, and smart cities. TIM said it was deploying small cells in order to minimise the visual impact of new network infrastructure across the republic.
The operator said it was aiming to create an ecosystem of public and private bodies who would be able to develop new services and solutions based on the new 5G network, which it said would be fully established "well ahead" of the 2020 date widely expected to be year zero for next generation services.
As part of the agreement signed between TIM and the Republic of San Marino, the operator will deliver smart city services, security, virtual reality for tourists and automated manufacturing solutions.
TIM is due to trial 5G in Turin next year, although its 880,000 population dwarves that of San Marino, which has 32,000 residents.
Giovanni Ferigo, Head of Technology at TIM, said: "We are among the first in the world to invest in the development of new ultrabroadband networks: they are the future, fast connections and the development of the city. When we talk about big data, digital identity and the Internet of Things, we are aware that underlying all this there is always the quality and speed of the networks.
"TIM has the privilege of being the leading company for the development of our digital culture, and, today, this agreement adds another major building block to our strategy, allowing us to create the first 5G State in the World, projecting the Republic of San Marino into the future ahead of countries such as Japan and South Korea, which have always led the way in technological innovation."