Taking a lesson from Indian market, Vodafone is planing to use its expertise in customer data to face the tough competition in Italy from French newcomer Iliad and avoid an India-style price war, Vodafone CEO Vittorio Colao said in a statement.
Colao said at Morgan Stanley’s annual TMT conference in Barcelona, “Do we expect something crazy? Honestly, after India, you can expect everything. We are ready to see everything.”
He further added that Vodafone’s strong data analytics had allowed the group to identify its “most vulnerable” Italian customers and to offer them special conditions adapted to their needs. He said the company had prepared for several possible scenarios, but declined to give more details about its strategy.
Colao said that he was “very happy” with the performance of the Italian business, as adjusted core profit rose 8.8 percent in the first half of the year, despite continuing price pressure.
Vodafone is the world’s second-largest mobile operator and number three mobile player in Italy, where it competes against former monopoly Telecom Italia and low-cost operator Wind-Tre.
Berenberg analyst Nicolas Didio asserted that Vodafone was doing the right thing to prepare for Iliad’s arrival, but the approaching battle was likely to go beyond pricing because Italy is a complex market and a new player like Iliad could be more inventive and audacious than existing players.
Didio said, “Iliad wants to be the customers’ champion and that’s precisely where they could win.” He expected Iliad to launch with a sole price including unlimited voice and text messages and a generous data package, and offer additional services such as free international calls from Italy or unlimited usage of voicemail.
He added, “These services will unlikely weigh on Iliad’s profits as their marginal cost is limited but they would be very powerful in terms of marketing.”
