Angelo Romagnoli
Post Italiane makes first moves in the oncoming Italian MVNO market
Poste Italiane yesterday confirmed its debut as a mobile virtual network operator in the oncoming opening of the Italian MVNO market. The company will deliver its services through Vodafone Italia's network and aims to have 2 million subscribers by 2011. This adds to previous MVNO announcements from players such as supermarket chain Carrefour, Auchan, Coop, and Conad, TV broadcaster Mediaset, Philippines player Pldt - as well as altnet players Fastweb, Tele2, Tiscali and Finmeccanica's satellite operator Elsacom.Comment: Italy's MVNO market is finally about to open up for business, considerably later than other European markets. In Italy's saturated mobile market (with more than 80 million active sim cards for a population of 56 million) there is a need for niche offerings that target specific segments. Poste Italiane will enter the market through its 14,000 offices nationwide, offering m-payment features through its BancoPosta saving deposit service. It may also offer additional mobile services that will differentiate it from competitors like UniPosta when the postal market is liberalized in 2009.Other companies are moving quietly into the MVNO space - for example, Coop's long talked of agreement with TIM will most likely combine telecom services with a loyalty scheme for members. Mediaset (setting aside rumours about acquisitions in the telco market) is likely to be looking to deliver its content to specific audiences. While the MVNO strategy seems fairly clear for non-telco companies, it is the pure telco players that have something to fear. There are several conditions that need to be met for the Italian MVNO market to be a success. Firstly, smooth mobile number portability (MNP) procedures must be established (and thoroughly applied. Secondly, as the market must be lucrative, MNOs' wholesale costs should allow MVNO players to get reasonable margins from the business - that is, MNO players must accept real competition despite that will eventually lead to margin erosion, as (lucrative) items such as text messages and data traffic fees are likely to become a battleground for competitors. The presence of MVNO players will not only boost competition but will also add to the complexity of fixed-to-mobile convergence. However, these changes to the market might bring about intervention from the local authority through a regulatory framework, which incumbents may not welcome. There are big challenges ahead in the Italian telco market, but also potential opportunities for all of the above-mentioned players.
