RealTime IT News

Tiscali Maneuvers Around Telecom Monopoly

While several telecommunications companies are marketing so-called "free" Internet services in Italy, Tiscali is the only operation that is getting close to making this a reality by maneuvering around the Telecom Italia's domestic monopoly.

Tiscali already enjoys over 710,000 Internet customers, CEO Renato Soru told reporters. With this new maneuver, it anticipates a growth rate of 32,000 subscribers per week.

But what is the magical element of Tiscali's marketing strategy that puts it a step ahead of their competition and two steps ahead of Telecom? Very simply, a cash-value rebate based on customers' online time.

Because Telecom Italia continues to maintain a monopoly on all domestic communications in Italy, Internet users are required to pay a per minute connection fee. So, in effect, the only thing "free" about the Italian offers for free Internet is the annual subscription fee charged by traditional ISPs.

In an effort to follow Great Britain's example of Internet service at zero cost, Tiscali began offering all customers signing up for its Freenet service through January 31, 2000, a rebate of 6 lira per online minute.

"With this formula the average 1.300 lira spent by a customer for online connection each hour, will result in a credit of 360 lira -- a savings of 30 percent," said Soru.

While not totally free, Soru explained that the Tiscali offer is one step closer to that ultimate goal.