This time Vodafone has planned to use its expertise in customer data to keep away from the competition in Italy from French newcomer Iliad and avoid an India-style price war, as per reported by the Chief Executive.
As per the sources accustomed with the plan, Iliad, backed by French billionaire Xavier Niel, is aiming to grab a quarter of the Italian mobile market using the same cut-throat prices that helped it to conquer France five years ago.
Talking of India, new entrant Reliance Jio took more than 6 percent of the Indian market in just a year, courtesy free voice and cheap data, forcing rivals, enlisting names like Vodafone, to drop prices and merge.
To this, Vodafone CEO Vittorio Colao regarded 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”.
With the French and Indian examples in mind, Colao, a former McKinsey consultant, regarded 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. This 56-year-old Italian further added 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.
Now, Vodafone is the world’s second-largest mobile operator and ranks number three on the list of mobile player in Italy where it competes against former monopoly Telecom Italia and low-cost operator Wind-Tre.
Berenberg analyst Nicolas Didio have supported Vodafone, regarding that it had done the right thing while preparing for Iliad’s arrival. But he also said 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 Further regarded that, he expected Iliad to launch with a sole price including unlimited voice and texts messages and a generous data package, and offer additional services such as free international calls from Italy or unlimited usage of voicemail.
To this, he added that “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”.