OMNITEL PRONTO ITALIA

Group 4

MOBILE TELEPHONE MARKET IN ITALY

Omnitel entrance increase the competition and also awareness about cellular product . Cellular penetration in Italy was 7.5% and was expected to increase to 22.8%. Italy cellular penetration was lower than other European countrys.

TELECOM ITALIA MOBILE

Formed in July 1995 after divested from Telecom Italia

and was listed separately on Italian stock exchange.

Monopoly over the Italian Communications market.

Offer 2 types of tariffs.

1. Euro family 2. Euro professional

OMNITEL STRATEGY
Establish in 1990 Launched its commercial services in dec 1995. In 1996 its market share was 4% Was able to obtain GSM license after liberalization Offered plans similar to TIM but focus was on highquality customer service.

Financial strength was not as strong as their competitor.

Its customers was pleased with the quality of customer

service which didnt increase its market share.

They started with a network coverage of 40% of Italian

territory

Cellular Phone Distribution

It sold its handset through 2000 shops.

CUSTOMER SERVICE
It focused on three main area 1. A polite operator at customer call. 2. Minimum customer waiting time

3. One stop call

It endeavored to maintain a low churn rate of 10%-15%

per yr.

MARKET RESEARCH
To increase its market share they conducted market research customers. The result showed that customer were very happy with its customer service. Customers wanted a different tariffs for local calls, longdistance calls and international calls by interviewing more than 5000 current

TREND IN EUROPE
Strong growth in European cellular market Penetration rate of 20%

Nokia maximum penetration rate.

The market penetration was expected to increase by

41.3% by 2000.

SWEDEN
Penetration rate of 23.4% Expected to increase to 55% in 10 years.

High acquisition cost

Liberation

NORWAY
Penetration rate of 25.1%.

High churn rate of 22%

Focused on creating loyalty among high-end customers

through quality service.

Marketed their services through dealers with whom they

had good relationship and use to get commission on sale.

UNITED KINGDOM
Market had grown strongly by 9.3% Vodafone with 43% and cell net with 42.3% market share were dominant players in united kingdom Subscriber acquisition cost was high

LIBERO: THE NEW PROPOSAL

Segmented the market in terms of needs, attitudes, patterns of usage, demographics and certain other characteristics from which they can achieve greater penetration by creating customer loyalty. He believed that cellular phones would become the main mode of communication.

Eliminating the monthly fee Charging full price for handset. Increase in demand Creating and promoting the brand image

PROBLEM
Building market share while avoiding a price war with TIM, and differentiating Omnitel brand from brand TIM.

ALTERNATIVE
No handset subsidies. No increase in dealer commissions