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.”

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