Some of the latest data from the International Telecommunications Union and Italy’s incumbent operator show that the popularity of cellular telephony is already beginning to have an impact on its older cousin. So said Barbara Poggiali, vice-president of strategy and business planning for Omnitel Pronto Italia SpA at the Telecoms Competition in Europe conference in Rome last week, sponsored by IBC Technical Services Ltd, Digital Equipment Corp and Public Network magazine. Competition from both of Italy’s cellular operators, Ms Poggiali said, has caused a drop in fixed-line penetration in Italy from 96.3 per 100 households in 1994 to 86.5 in 1995, as well as a drop in traffic volumes, notably for long distance. In fact, continued the Massachusetts Institute of Technology-educated Ms Poggiali, it is little wonder that many Italians are foregoing traditional telephones when tariffs for the two are converging. The average monthly fee for cellular use, $6.66, is actually lower than for a fixed line, $7.86, particularly for a second line at $11.46, she said. Admittedly, business monthly fees for cellular lines are higher than the rates mentioned, but Ms Poggiali confined her remarks to the consumer market. Futhermore, she said, while urban fixed-line consumer call rates ($0.02) are 10 times cheaper than mobile consumer rates ($0.20), long distance rates are quite similar. Long distance fixed network rates are $0.16 per minute. Ms Poggiali said, in order for Omnitel to take a dvantage of the opportunity in Italy by expanding into converged mobile services, the Italian government must address four issues. First, it must allow Omnitel Pronto Italia to renegotiate the high ($0.13 a minute) interconnect charge it pays Telecom Italia SpA for access to the fixed network; second, it must reallocate the radio spectrum to provide Omnitel Pronto Italia more frequency; and third, it should eliminate the restriction on Omnitel connecting PABXs to its own switches. Finally, she said, it should eliminate the two-year moratorium on any operator other than Telecom Italia using Digital European Cordless Telephony technology. For reasons unknown, the Italian Ministry of Posts & Telecommunications has determined that Digital European Cordless Telephony technology belongs to the domain of fixed network telephony, giving Telecom Italia exclusive rights to experiment with it.
