26
MARKET ANALYSIS
Forza mobile
The fiercely competitive Italian market is characterised by multiple
SIM-owning, predominantly pre-paying, fashion hungry 3G customers
�our mobile carriers—Vodafone,
Telecom Italia, 3 and Wind—currently
operate in Italy, although
a number of specialist MVNOs have
established themselves on the scene
within the last year. It is the second
largest cellular market in Europe
behind Germany.
According to Informa Telecoms &
Media’s World Cellular Information
Service the 100 per cent penetration
barrier was passed long ago, during the
summer of 2004. At the time of going
to press, teledensity in Italy stands at
nearly 150 per cent.
Year-on-year, mobile subscriptions in
Italy grew just under eight per cent in
Q108, to 86.4 million, up from 80.1 million
in Q107. However, net additions for
the quarter amounted to only 280,680,
representing a quarterly growth rate
of 0.33 per cent. In terms of net adds,
Vodafone had the best quarter, followed
by Wind and 3. Telecom Italia, however,
lost subscriptions in Q108.
Vodafone successfully offset the first
quarter seasonal dip through a series
of targeted promotions that stabilised
subscription growth and increased messaging
volume. The latter was up 31.8
per cent year-on-year. Recent regulatory
decisions on termination rates have
made a large dent in Vodafone Group’s
voice revenue in all EU countries. In
Italy, the firm’s Q108 voice revenue fell
7.9 per cent. But strong demand for
mobile data connectivity and devices
came to the rescue, and data revenue
increased 17.2 per cent year-on-year.
With about one in four prepaid
customers and one in five contract
subscribers switching their mobile
service provider, Vodafone has delivered
an impressive feat by increasing
its subscription base. But what it has
not achieved is sufficient customer
contentment. The lack of “stickiness”
is a problem. For fixed-line providers,
bundled service offerings provide an
excellent way of increasing customer
retention. With the acquisition of Tele2’s
Italian operation in late 2007, Vodafone
now has a powerful bundling option
for mobile and fixed services. Once
implemented, churn rates may well fall
in the longer term.
Italy is currently the largest 3G
market in Western Europe and all
four MNOs run sizable 3G networks. A
fourth 3G licence was granted to IPSE
2000—a consortium led by Spain’s Telefonica
and Finland’s Sonera. However,
it was revoked in 2006 in light of the
firm’s failure to deploy in accordance
to licence obligations.
Subscriptions to 3G services stand at
over 25 million—up by more than eight
million since 2006. Italian 3G subscribers
account for roughly one quarter
of the total WCDMA subscriptions
in Western Europe, though as more
countries grow their 3G subscriber
bases, that market share will inevitably
come down.
More than 87 per cent of mobile
subscriptions in Italy are prepaid, which
might paint Italy as the ideal environment
for service providers intent on
marketing solely prepaid offerings.
Italy’s mobile network operators
long resisted the pressure to open
their networks to MVNOs. But in late
2007 and early 2008, several MVNOs
launched services with immediate
success. In April 2008, the three
largest Italian MVNOs—UnoMobile
(Carrefour Italia Group), CoopVoce
and PosteMobile—reported a total of
500,000 customers since launch, up
from about 260,000 in Q407.
PosteMobile launched its service in
November 2007 and concentrates on
mobile micro payments. Astelit (branded
Life J) and Daily Telecom Mobile will
target ethnic communities (Ukrainians
and people who make calls to Hong
Kong, Macao or Taiwan, respectively).
But there are also those MVNOs that
owe their existence to the increasing
pressure for fixed mobile convergence.
Vodafone’s purchase of Tele2 is a step
in this direction. Moving towards the
same point from the other direction,
fixed network operators FastWeb and
Tiscali have both signed contracts for
their MVNO operations in the first
half of 2008.
Using existing technology and infrastructure
is one route to market,
deploying a WiMAX network is another.
In February 2008, 22 bidders were still
actively looking to acquire WiMAX
licences in Italy. Telecom Italia and
broadcaster Mediaset placed bids; »
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