Those in the business of making industry predictions say ‘5G monetisation’ will be one of the most important themes of 2020. However, for Italian 4G mobile players currently in the midst of a highly disruptive price war, the more relevant question of the day is how legacy networks can be maintained at a decent profitability margin. And that’s before the massive costs of upgrading nation-wide networks to 5G are taken into consideration.

Recently, converged operator Wind Tre launched yet another new super low-cost, no contract secondary brand, Very Mobile, with an early-bird promotional offer. This offer included unlimited calls and texts, plus 30 GB of 4G data for under €5 monthly, for the first 20,000 takers.

Without doubt, this is one of the lowest priced mobile data offers anywhere in the world, calculated per GB. In Italy, however, it’s barely remarkable. Italian mobile offers are now so low, it’s difficult to imagine where the benchmark can go from here.

Long standing 4G price wars

The Italian market has been in the midst of an aggressive price war for some time. The trigger was the market entry of Iliad – the low-cost company which wrought price war havoc in France some years ago.

Taking advantage of the merger of two of the three Italian MNOs, Iliad bought up available spectrum and immediately took an aggressive price stance. Iliad Italia is currently offering a smartphone plan of unlimited text and calls, plus 50 GB of data for just €7.99. Vodafone Italy is relying on its secondary brand Ho, with a current offer of 70 GB of 4G data plus unlimited calls and text for €5.99.

Predictable response

In response, the market incumbents TIM, Vodafone and Wind Tre have attempted to respond with the only two tactics known to the European telco. Service bundling (fixed-mobile packages) and unlimited data offers at a higher price. Yet, with new no-contract bundles featuring 30 GB and more, it’s becoming harder to position ‘unlimited data’ as a differential. Few users consume more than 20 GB monthly, and for such consumers 30 GB will be viewed as more than sufficient, and just as good as ‘unlimited’ for a fraction of the price.

At the same time, these operators are struggling to find the right marketing pitch for a 5G premium package. They are trying to encourage consumers to pay more, for a mobile experience which to date means little more than ‘faster’.

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