Omnitel Pronto Italia

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Omnitel Pronto Italia
1.What was Omnitel’s advantage when the service was launched in December 1995? Why did the launch not perform to expectations? Omnitel was the first private sector participant in Italian telecommunication market. The company paid $469 million in December 1994 for GSM license and launched its commercial service in December 1995 with network coverage of 40% of Italian territory. The company offered plans similar to its rival Telecom Italia Mobile (TIM)’s with the hopes that superior customer care would be its competitive advantage. Customer service focused on 3 main areas:

A Polite/Personal approach of the operator
Minimize a customer’s waiting time during a call with a goal to have a zero waiting time •One-Stop Call i.e. operators were trained to answer all of a customer’s questions and tried to avoid transferring a call to another operator

However, after several months’ data proved that although customers were pleased with the quality of service, the strategy did not result in a corresponding increase in market share. Only 4% of the market was gained as a result of this initiative. In January 1996, Omnitel reported 60,000 subscribers (its first month of service) and by May 1996, only 180,000 subscribers had signed up. Omnitel was at a critical stage at this point unless penetration in the market is achieved prospects for growth were limited. By means of a market survey conducted it was found that a large share of mobile phone users were reluctant to change brands. Unless Omnitel introduce new revised plans and schemes the company would not appear attractive to prospective customers. So, company’s strategy of differentiating just based on the superior customer service was not so successful.

2.How does the revenue from the proposed LIBERO plan continue to those from Omnitel’s current calling plans? Omnitel’s strategy:
oNo intention to reduce prices.
oFocus on the High end of the market.
oReducing the churn...
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