OMNITEL PRONTO ITALIA

The European Commission had declared that all member states would have to open their markets and guarantee competition in the telephone markets by January 1998. But the pressure for business interests made the European Commission anticipated the cellular telephony, which started in 1994. However some liberalization was subject to interpretation by the countries involved. The state-owned TIM had had a monopoly over the Italian telecommunications market until that time. But the market changed when the Omnitel started …

…point of view. So the companies reduced a little the price, but the cellular companies were focusing on creating loyalty among their high-end customers through quality service, rather than offering further price reductions to their low-end customers. The low-end customers were much price sensitive, changing subscriptions according to the prices offered. The cellular companies marketed their services directly to the end user through dealers, paying sometimes commission to encourage sales, and offering subsidies on handsets.