Milan (AFP)
Just a year ago, Iliad landed in Italy, ready for the "revolution".
If, with its broken prices, the French group has clearly shaken the telecom market, its presence is still limited, waiting for its arrival on the fixed and the world of the internet.
5.99 euros per month, including SMS, unlimited calls to 65 countries, 30GB internet: in a show atmosphere, the Iliad general manager in Italy, Benedetto Levi, launched his first mobile offer on May 29, 2018 in Milan.
A package limited to the first million customers (but eventually sold to 1.2 million) he presented as "revolutionary", when the similar packages appeared, according to him, to 12 euros at Wind, 15 at Tre, 18 at Telecom Italia (Tim) and 30 at Vodafone.
"The entrance of Iliad has been aggressive" and "naturally, the group has been successful," said Justinas Lasinskas, an analyst at Euromonitor International, which nevertheless believes that "can not speak of revolution."
Iliad now claims 3.3 million subscribers (at the end of March), a good start, even if its market share, around 4%, is still limited. He is far behind Wind Tre (27 million subscribers), Tim and Vodafone (about 22 million each), notes Ms. Lasinskas.
- "Price war" -
Its impact has nevertheless been major in the market.
"Consumers have been the big winners of their arrival, with a general lowering of tariffs by all operators and the creation of low-cost brands at Tim and Vodafone." The fall in the price of services was very important, almost 5% in 2018, "explains Marta Valsecchi, director of the Observatory of Digital Innovation at the Polytechnic Business School in Milan, also mentioning" an increase in data available in packages ".
"These low-cost offers triggered a price war in the industry, all operators are losing revenue," says Lasinskas.
"Wind Tre is the one that has suffered the most, with a decline in its double-digit mobile revenues.It is a direct competitor of Iliad, its customer is sensitive to the price and therefore more likely to change operator", note -t it.
Wind Tre saw its mobile customer base fall by 8% in 2018, while Tim's mobile revenue plunged 11.4% in Italy in the first quarter, after falling 3.1% on the year 2018.
As for Vodafone, it presented to unions in March a plan to reduce its workforce of 1,130 people, or 15%, to respond to the "structural transformation of the market and the drastic fall in prices linked to the extraordinary competitive pressure ".
- Investment problem -
"There was already a strong price war a few years ago, and Italy already had an Arpu (revenue per subscriber) lower than other European countries" like Germany, the United Kingdom or France recalls Ms. Valsecchi.
"This is an industry that has to invest heavily year after year to ensure high-speed infrastructure," she says.
For Ms. Lasinskas, Iliad "distorted" the game with its very comprehensive offers "extremely low price": "this is an unsustainable approach to the competition", which will not last.
In front of the investors on May 7th, Benedetto Levi underlined that the Iliad brand had succeeded in less than a year to be "known by more than 90% of Italians" and "associated with values + differentiating +: simplicity, innovation , transparency, with the absence of hidden costs ".
"Despite very aggressive offers from our competitors and two successive increases in our prices," the subscriber base is still growing, thanks to the distribution network set up in a very short time, online and via sim card distributors, he said.
By 2024, "we want to become a convergent operator" fixed and mobile, said the director general of Iliad, Thomas Reynaud.
The group aims for an annual turnover of 1.5 billion euros in Italy in the long term - far from the 80 million recorded in the first quarter - and a gross operating surplus, now negative, to balance in the medium term.
? 2019 AFP