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Flavio Cattaneo says Xavier Niel won’t be able to repeat the same strategy that Free Mobile used to shake up France.
Telecom Italia CEO Flavio Cattaneo this week played down Iliad’s potential to shake up the Italian mobile market the same way it did in France.
"Iliad’s entry into Italy does not worry us. Italy is a very different market to France," Cattaneo said, according to a Reuters report on Wednesday.
Xavier Niel’s Iliad is set to launch in Italy after it agreed to acquire spectrum and base stations divested by 3 Italia and Wind as per the conditions of their €21.8 billion merger, which was approved by the European Commission at the beginning of the month.
When Iliad’s Free Mobile unit became France’s fourth operator in early 2012, it sparked a fierce price war, disrupting the market with its cheap tariffs.
At the end of June this year, Free Mobile had 12.1 million customers, good enough for a 17.4% share of the market.
According to sources cited by Bloomberg earlier this week, Niel has set a target of snatching a 10%-15% share of Italy’s mobile market by adopting the same tactics used by Free Mobile in France. To keep costs down, the company will focus on selling services online rather than through physical stores, the sources said.
However, Cattaneo said in Wednesday’s Reuters report that unlike France in 2012, Italy’s mobile operators have already endured a price war, with consumers enjoying cheap tariffs as a result.
"And from our side there will be countermeasures," he said.
An analyst note from Haitong Research also played down the significance of Iliad’s impending arrival in Italy.
"While we believe this is a potential threat given Iliad’s aggressive commercial strategies, we think the impact should be more limited than the one Iliad caused in the French market when it launched in 2012," Haitong said.
