Omnitel Pronto Italia Case

Executive summary Omnitel Pronto Italia was a new telecom company that entered the Italian telecom industry in 1995. As a new entrant into the telecom industry, Omnitel wanted to achieve greater market penetration in Italy. It offered a similar plan to Telecom Italia Mobile (TIM), a state-owned and monopolistic company in the telecom industry, with high-quality customer service. However, it only had 4% market share in the initial six months of operation, which was lower than its initial expectations. Omnitel expected to implement a new market strategy, where subscribers pay zero monthly fees, but pay full handset price to differentiate itself from TIM, without getting into a price war. Besides eliminating monthly fees, I recommend Omnitel …show more content…
I would recommend Omnitel changes its focus from the upper echelon of society to medium or medium-high class, offering a flexible price for calls to its subscribers and choosing the right locations for its stores to implement its plan more effectively. An effective way to gain attention from medium or medium-high class is eliminating the monthly fee, which is the main idea in the LIBERO plan. Omnitel takes actions, like raising its price up to lit. 200 per minute, offering flexible price for calls, such as a different set of tariffs for local calls, long distance calls, and international calls, and changing distribution of stores to where lots of medium or medium-high class …show more content…
Management considers the risks of option one, taking actions to minimize those risks, and generating alternative strategies if Omnitel fails to implement option one. Also, it’s necessary for Omnitel management to develop a backup plan if it leads to a price war. The company's long-term vision is to attract 93.5% of customers not penetrated (Exhibit 1). Therefore, it is important for Omnitel to identify customers’ demands and determine a plan of action to fulfill their