Essay on Omnitel Pronto Italia

1413 Words Mar 19th, 2007 6 Pages
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
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• Threats:
 Italians still consider mobile phones a status symbol viz. a viz. a utility.
The cellular phone was a possession that was both expensive and exclusive.
Something that only people of a certain stature had the right to own.
 Due to a shift in the business plan, the company might lose its existing customer base-
As we have seen that the subsidized handsets might create a negative image of the company in the minds of the Italian customers, our existing customers might opt out as they might not want to be associated with a brand like that.
3
LIBERO - No monthly subscription charges and no handset subsidy
In this plan we provide a plain calls package sans the monthly subscription. We do not provide any handsets.
• Strengths:
 According to our Market research report, a lot of people have asked for a plan in which there are no monthly subscription charges.
 Low cost of acquiring a customer? As we dont have to pay subsidies, it reduces the cost of acquiring that connection.
 Lower commissions for dealer - This will further reduce our acquisition cost per cus- tomer. We are expecting to have high sales volume which will oset the decrease in commission rate.
 No signup fee - as there is no contract there is no signup fee.
• Weakness:
 Higher call charge - As there is no monthly

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