Omnitel Pronto Italia

Omnitel Pronto Italia Case Analysis Introduction Omnitel is a telecom company based in Italy, which had purchased the GSM license on Dec 1994. In a country where mobile phones are considered as a status symbol, Omnitel focuses on providing superior customer service and therby reducing churn rates. The company has a marketshare of 4% and is capable of giving Telecom Italia Mobile (TIM), the market leader, a close run for their money. The vision of Omnitel is to position cellular phone in a manner akin to wristwatch, which is personal and indispensable. Push Strategy by the monopoly market Leader TIM Vs Pull strategy of the new comer Omnitel: Telecom Italia with a 97% share of the 7.5% market penetration rate in Italy had a sole aim of maintaining their cash flows. Hence apart from a high priced talk plans (relative to European counterparts) in response to the new competitor, TIM decided to offer incentive to the dealers. TIM was also responsible partly to the Italian customer perception that mobile phones more of a status symbol than a necessity. Omnitel, after paying a price of GSM acquisition in 1994 had no intention of entering a price war with the market leader. Instead it positioned itself as a better customer service provider. Though this strategy helped to gain customer satisfaction and lower churn rate (12.5% Vs 22% of TIM) it did not result in sales volume. Hence there was a proposal of new campaign called Libero by its Marketing Director. Libero “Libero” a unique plan proposed by Bona keeping in mind the current market and usage of the cellular phone. Libero plan was structured to compete with TIM, the leaders with high market share. It revolutionized the approach from the telecom company as it offered the plan without monthly fee. Libero plan has customized call rates of Lit.1595 and Lit.195 during peak and off peak hours respectively. By eliminating the fee Omnitel wanted to increase the customer base as well as call volume. Despite of the fact that