CASE OVERVIEWOmnitel entered the Italian telecommunications market in February 1995. Until then the Italian telecommunications market was dominated by Telecom Italia Mobile which held a monopoly. The first private company to enter the Italian telecommunications market was Omnitel. This was facilitated by the decision taken by the European Commission (EC) in 1993 that all member states should open their markets and ensure competition in the telephony market by January 1998. Omnitel had to purchase a GSM network license for 760 million dollars. Currently the biggest competitor for Omnitel is Telecom Italia Mobile (TIM), founded in July 1995 and listed on the Italian Stock Exchange after the split from the parent company Telecom Italia. TIM had a customer base of over four million and held 97% of the market share. STRATEGY TO GAIN MARKET SHARE Omnitel is currently at a critical stage, unless market penetration is achieved, growth prospects are limited. During the first six months Omnitel offered plans similar to TIM and mainly focused on high-quality customer service. This was the only differentiating factor between Omnitel and TIM. A market survey carried out revealed that a large share of mobile phone users are reluctant to switch brands. Unless new plans and revised schemes were offered by Omnitel, the company would not appear attractive to potential customers. Two high-level Omnitel executives had different views. Fabrizio Bona, marketing director of Omnitel, proposed the idea of ​​LIBERO, which completely eliminated the monthly fee and paid only for the duration of the calls made by the customer. At the same time Francesco Caio, CEO of Omnitel was of the opinion of offering customers branches in exchange for signing a contract with the company. This would be done in lieu of eliminating the monthly fee charged to its users. He was of the opinion that by doing so he could guarantee a constant income from the monthly dues. Such schemes had worked elsewhere in Europe. ALTERNATIVES AND THEIR SWOT ANALYSIS Subsidized Contract Phones In this plan we provide customers with a cell phone at a below-market rate (in addition to the usual price plan). • Strengths: Proven strategy in other European markets. Tested and proven in many other countries. A decrease in the cost of phones could attract customers: Subsidies would lead to a decrease in the price of phones, thus decreasing the initial cost of acquiring a connection for a customer. Constant revenue stream for the contract period: this guarantees constant