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Omnitel Cell Phone Market Share Strategy

            The main problem Omnitel faces is gaining market share from Telecom Italia Mobile (TIM), a state owned and operated provider. TIM enjoyed a monopoly over the Italian telecommunications market until Omnitel's entrance into the market. Omnitel needs to differentiate and improve its offerings to customers from those of TIM since market survey results found a large share of Italian mobile phone users were reluctant to change brands. Unless Omnitel offers new revised plans and schemes, the company will continue to struggle in gaining market share as it doesn't differentiate itself from TIM enough to appear to be more attractive to prospective customers. The best way for Omnitel to distinguish itself from TIM could be to remove the monthly subscription charges, not subsidize its handset and most importantly target the middle to middle/upper class instead of the high-end customer base. .
             Omnitel put a lot of effort into customer service and has been really successful in providing this attribute. However, market surveys have shown why this strategy has not generated greater returns for Omnitel; customer service is not considered nearly as important as monthly subscription charges in the customer's eyes when selecting a cell phone provider. The key part of the proposal is to remove the monthly subscription charges to maintain and increase their share in the cell phone market. This innovative and pioneer idea should lead to an increase in market penetration and motivate TIM's customers to join Omnitel since TIM will struggle to incorporate this strategy in the short run. This would give Omnitel the first adopter advantage resulting in an upper hand in acquiring market share. The second part of the proposal is the decision of keeping the handset strategy the same as today (no subsidization). Italians have demonstrated a willingness to purchase handsets so it would be futile to "give" away handsets to gain market share.


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