It appears that France's enfant terrible Iliad could be about to bring its novel way of doing business to the Italian mobile market. I hope Italy's operators are bracing themselves for the onslaught.
Iliad, which operates under the Free brand in France, confirmed late on Tuesday that it has agreed to buy the mobile assets that CK Hutchison and VimpelCom plan to sell in order to secure European Union approval for the proposed merger of Three Italy and Wind. The Iliad deal is conditional on EU approval of the merger.
Should everything go ahead as the three operators intend, Iliad would have enough assets to become the fourth mobile player in Italy.
It's enough to leave rivals quaking in their shoes.
Certainly, Italy is no stranger to market disruptors. Three itself falls into this camp because of its aggressive pricing strategy and all-you-can-eat data offerings in a number of markets including the UK. In Italy, however, it has not adopted this "unlimited" data strategy; indeed, up to now Wind has provided the largest smartphone data allowances on the market.
It is clearly far too early to speculate what new offers Iliad might have in mind for Italy, but there is plenty of scope for disruption. Also worth remembering here is that Free Mobile sparked a price war in France that brought about a fundamental and lasting change to the French mobile market. Free Mobile offers an extraordinarily competitive rate of just €2 ($2.21), while the €19.99 tariff includes 50 GB of 4G data.
Iliad said it plans "to capitalise on the experience it has acquired in France with the successful launch of a fourth mobile network operator in 2012," in a somewhat ominous message from the operator.
All now rests on what the European Commission decides to do. Doubts have been raised over the likely success of the Three-Wind merger proposal, in part because of EC resistance to mergers that reduce the number of mobile network operators within a market from four to three. In Italy, the remedy package agreed with Iliad could allay its concerns. The EC has until Sept. 8 to present its conclusions.--Anne