Omnitel Pronto Italia
CASE OVERVIEW
Omnitel entered the Italian telecommunication market in February 1995. Till then the Italian telecommunication market was dominated by Telecom Italia Mobile which had a monopoly in this market.
The rst private company to enter the Italian telecommunication market was Omnitel. This was facilitated by the decision taken by the European Commision (EC) in 1993 that all member states should open their markets and guarantee competition in the telephony market by January
1998. Omnitel had to purchase a license for the GSM network for 760 million dollars.
Currently the biggest competition for Omnitel is Telecom Italia Mobile (TIM) which was formed in July 1995 and was listed in the Italian stock exchange after splitting from its parent company
Telecom Italia. TIM had a customer base of over four million and held 97% of the market share.
STRATEGY TO OBTAIN MARKET SHARE
Omnitel is at a critical stage at this point unless penetration in the market is achieved prospects for growth are limited. During the initial six months Omnitel oered plans similar to TIM and focused mainly on high quality customer service. This was the only dierentiating factor between
Omnitel and TIM.
By means of a market survey conducted it was found that a large share of mobile phone users were reluctant to change brands. Unless new revised plans and schemes by Omnitel were oered the company would not appear attractive to prospective customers.
Two high level management executives of Omnitel were of diered viewpoints. Fabrizio Bona the
Marketing Director of Omnitel proposed the idea of LIBERO, which eliminated the monthly fee completely and making payments for only the time duration of the calls made by the customer.
At the same time Francesco Caio, CEO of Omnitel was of the opinion of oering customers handset subsidaries in exchange for signing a contract with the company. This would be done as a substitute to eliminating the montly fee charged to its users.
Omnitel entered the Italian telecommunication market in February 1995. Till then the Italian telecommunication market was dominated by Telecom Italia Mobile which had a monopoly in this market.
The rst private company to enter the Italian telecommunication market was Omnitel. This was facilitated by the decision taken by the European Commision (EC) in 1993 that all member states should open their markets and guarantee competition in the telephony market by January
1998. Omnitel had to purchase a license for the GSM network for 760 million dollars.
Currently the biggest competition for Omnitel is Telecom Italia Mobile (TIM) which was formed in July 1995 and was listed in the Italian stock exchange after splitting from its parent company
Telecom Italia. TIM had a customer base of over four million and held 97% of the market share.
STRATEGY TO OBTAIN MARKET SHARE
Omnitel is at a critical stage at this point unless penetration in the market is achieved prospects for growth are limited. During the initial six months Omnitel oered plans similar to TIM and focused mainly on high quality customer service. This was the only dierentiating factor between
Omnitel and TIM.
By means of a market survey conducted it was found that a large share of mobile phone users were reluctant to change brands. Unless new revised plans and schemes by Omnitel were oered the company would not appear attractive to prospective customers.
Two high level management executives of Omnitel were of diered viewpoints. Fabrizio Bona the
Marketing Director of Omnitel proposed the idea of LIBERO, which eliminated the monthly fee completely and making payments for only the time duration of the calls made by the customer.
At the same time Francesco Caio, CEO of Omnitel was of the opinion of oering customers handset subsidaries in exchange for signing a contract with the company. This would be done as a substitute to eliminating the montly fee charged to its users.