Low cost offers and limits on antennas. From the Government assists the large Telcos, the amendments in the Competition decree pass

Low cost offers and limits on antennas.  From the Government assists the large Telcos, the amendments in the Competition decree pass

The Government comes to the rescue of the large mobile telcos in the Competition Decree, as confirmed in the text approved in the Senate this week (while waiting for the Chamber). With an amendment, he removed the block on the possibility of making super low cost offers, widely used by Tim, Vodafone and Wind Tre to better compete against Iliad and the virtual ones. Another Government amendment corrects the aim of the increase in electromagnetic limits. The text also increased two other values ​​of these limits, in addition to the basic one (volts per meter) already elevated in the text approved by the competent commission in the Senate.

The previous Concorrenza text had alarmed the big techs regarding low cost offers, so-called “operator attacks”.. They cost between 5 and 10 euros per month and cannot be activated by all users but only by those who have certain operators and require number portability.

The type of operator depends on the specific offering; usually you find the names of Iliad, Spusu, Poste Mobile, Fastweb (all or some of these), of other virtual operators, but never those of Kena, Very and Ho, which are the virtual ones of Tim, Wind Tre and Vodafone.

A majority amendment had blocked offers aimed at users of specific operators as “anti-competitive and discriminatory”.

An analysis circulating in the world of large telcos explains the reasons for alarm.

In Italy the number of SIM cards used in cell phones continues to decrease; in the absence of new segments or customers to conquer, in fact almost all activations now involve customers switching from one operator to another. The main, almost absolute, lever for competition is price. Two data confirming this picture (Agcom source): the level of customer loyalty is very low and decreasing; in the last four years, the number of SIMs associated with a subscription has gone from 13.9 to 10.3%, and prepaid ones from 86.1 to 89.7%.

Between June 2019 and June 2023, the aggregate market share of the top three operators lost 13.1 percentage points to Iliad, Poste and other virtual ones (from 84.6 to 71.5%) – 2.2 percentage points in the last twelve months of the period.

Without selective offers (operator attacks), the main operators believe they would have lost even more market share. Equal to 3.2 million fewer customers. The aggregate market share of the three main operators would thus fall to around 67.4%, the unit cost of customers would skyrocket, making economic activity unsustainable with the current perimeter of investment and operating expenses.

To avoid this scenario, the main operators would have to reduce prices across the board, but they would then face another problem: the loss of profits, which is already constant. In a vicious spiral that would quickly bring prices towards the 7-8 euro threshold. Consumers would perhaps rejoice, but only for a short while, because the quality of service would collapse in Italy. With damage also to the economic system, which is increasingly dependent on the quality of network infrastructures. Furthermore, the use of mass layoffs by operators is almost certain, as already feared several times.

The Asstel 2023 report presented in recent days highlights a dramatic situation: in 2022 in Italy the cash balance of operators is negative for the first time and equal to minus 3.8 billion euros (in 2010 it was 10.5 billion).

The Government’s amendment therefore removes the block and adds a small limit to these offers: operators will not be able to use data on number portability to decide which competitors to target.

Moreover, the Antitrust had already requested it, to reduce the anti-competitive effects of information asymmetry.

As regards the limits, the increase in the other two values ​​only serves to respect technical coherence compared to the first value already high during the commission. Specifically, the Competition Decree indicates that within 120 days of the entry into force of the Competition Decree (expected by the end of the year), a decree will have to set new limits “in light of the most recent and accredited scientific evidence”. The Competition foresees the hypothesis that these days will pass without a decree; in this case it indicates the limits to be applied: higher than the current ones but still much lower than the European average. The operators consider it a first and useful step forward but now aim to fight in the decree to obtain a more substantial increase.

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