RealTime IT News

Telecoms Battle for Italian Net Market

Telecommunications competition has created a battle for the Italian Internet market as a result of recent European deregulation.

Almost overnight international partnerships such as Albacom and Infostrada are competing with long-time, state-operated Telecom Italia for individual Net users, as well as carriers for independent ISPs.

For decades Telecom Italia maintained a monopoly on Italy's telecommunications. As a member of the European Union, however, the government was forced to privatize the company and sell off its majority of shares to the public. In addition, EU telecommunications regulations required that competition be allowed to enter the Mediterranean peninsula in 1998.

Internet service providers such as Italy Online and Galactic--two of the country's largest ISPs-until the recent deregulation, were forced to contract with Telecom Italia and accept the rates the monopoly offered, if they were to remain in business. Now, ISPs like the Naples-based Cybernet are finding they can reduce overhead by switching to a new carrier.

"All of our traffic now goes through Infostrada," explained Alessandro Citarella, director of Cybernet s.r.l. "As a result, we've greatly reduced our carrier expense, without sacrificing quality."

In an effort to maintain its share of the Internet market, Telecom Italia has invested heavily in its own ISP, Telecom Italia Network (TIN). Using the same marketing strategy applied by America Online, TIN is offering free software in computer magazines, as well as print and television advertising.

Infostrada, a joint venture of Olivetti and Mannesmann, has countered TIN's offer with its Infostrada On Line package, which provides annual service for nearly 25 percent less than its national competitor. In addition, the innovative group offers clients an option to add voice service into their package for savings of up to 50 percent.

Albacom, a consortium of British Telecom, Mediaset and Banco Nazionale di Livoro, has also begun promoting its own remote access, global Internet service called Albavia.

One of the most innovative marketing concepts to come from Italy's telecom battle is that of the Consorzio YESNET Provider. This group, unlike others, offers a pre-paid card for Internet accesses sold in increments of 20, 50, and 100 hours. In a country where ISP access also means a charge for each minute of connection by local telephone companies, such a card is sure to be a success.

As the advertisements point out, "This is the answer for those who don't want an additional telephone bill."