Telephony, goodbye to offers for those who change operator

STOP OPERATOR ATTACK

• Two have passed the Senate committee amendments of the majority to the Competition Bill they ban the practice of “operator attack”, i.e super discounted rate offers for your cell phone riots exclusively to users who come from certain operators. But could the effect of this rule be negative for the market?

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“HIDDEN” OFFERS

• According to what he reports The Republic, the “operator attacks” are offers used for years by telephone companies such as Tim, Wind Tre and Vodafone offering prices much lower than the market average, from 5 to 8 euros per month, and rich in GB. However, they are often “hidden”: they are not found on websites, but only in certain shops. In some cases they are instead on web pages not connected to the operator’s home page. And especially, they cannot be activated by all users, but only by those who have certain operators and require number portability

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THE OFFERS

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

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THE OPINION OF THE ANTITRUST

• The amendments accept a warning from the Antitrust, according to which “such conduct may have an impact extremely negative effect on the development of competition in mobile telephony” According to the Antitrust, these offers contribute “to blocking the development of new entrant operators and at the limit to causing the exit of some of them from the market, thus eliminating the competitive stimulus towards traditional operators that it has had up to now brought numerous benefits to end consumers”

NOT TRANSPARENT OFFERS

• For the Antitrust there is also the question of consumer protection because these offers are considered not very transparent, which is why they were sanctioned by the Antitrust itself and by the Court of Milan

THE RISKS

• According to the amendments’ detractors, in a liberalized and hyper-competitive market, abolishing the practice risks leading to a Price war without borders: to compete the “big” telephony companies should align them fully with those of companies like Iliad and the virtual ones. The consequences could be, in a deflationary scenario for the sector already consolidated for years, the collapse of revenues and profits on the part of managers and the continuous threat of widespread recourse to layoffs and social safety nets

NICITA: “CASE OF OVER-REGULATION”

• “I believe that the existing legislation on non-discrimination would allow the various authorities to intervene on the point, as has been done in the past. I agree with Agcm that selective winback generates competitive distortions but only if associated with individual or collective dominance”, commented Antonio Nicita of the Democratic Party at Republic adding that “the rule and the amendments are a case of over-regulation compared to cases already treatable with existing rules in cases where it is necessary”

THE EXAMINATION OF THE PARLIAMENT

• For now, as mentioned, the amendments have passed through the Senate Committee, but it remains to be seen whether the law will survive the examination of Parliament, first in the Senate and then in the Chamber

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