Omnitel Pronto Italia

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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…show more content…
 Customers may buy the phones and never make calls thereby reducing overall revenues and increasing our administrative costs. • Opportunities:  First mover advantage might give us an upper hand in acquiring market share which the competitor might struggle to cope with in the short run.  Large untapped market? With a penetration rate of 7.5%, such a plan may lead to a sudden increase in market share/penetration which our competitors may struggle to catch up with in the long term. • Threats:  Possible price war: A price war with TIM might seem imminent if such a plan is brought out in the market.  TIMS responded to Pronto's entry in the market by rewarding their highest performing dealers and oering them shares. Therefore we can infer that TIM will be aggressive in its initiatives to retain its market share.  Since this has not been tried in any market in Europe, the risk of employing this strategy is high. 4 LIBERO + + ..... + Unlimited Flexibility Guaranteed In this plan we provide various options such that they can build their own plan (they can choose a subsidized handset, opt for a monthly subscription charge and/or forego both of them). Subsidy Call Charges Monthly Subscription Charge Low Low Yes High Low Yes Low High No High High No XXX Low Yes XXX High No • Strengths:  Flexibility to customer in terms

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