AGCM, the Competition and Market Authority, presented some reform proposals that could lead to a revolution in the mobile telephony sector. Second as reported by SOS Ratesthese proposals have been made in view of the revision of the Competition Act of 2023 and they also include the need to curb “operator attack” offers.
We all know operator attack offers: they are special rates offered by some mobile phone operators, which can only be activated by requesting number portability from another selected operator. This type of offer has gained popularity after Iliad’s entry into the Italian market and the growing diffusion of virtual operators. In many cases, these offers are aimed specifically at customers of Iliad and virtual operators such as PosteMobile, Fastweb and others. Incumbent operators such as TIM, Vodafone and WINDTRE, as well as their secondary brands, known as “semi virtual” such as Kena, ho. and Very Mobile, are among the promoters of these offers.
The objective of these operator attack offers is clear: to reduce the number of customers of competing operators.
For example, operator X could make available a special rate Y, with particularly convenient conditions, which can only be activated by customers of operator Z. This is seen as a way to counter the competition represented by operator Z and to attract its customers towards your offer.
At present, these offers are perfectly lawful and do not violate any regulations. However, the AGCM has highlighted some risks associated with this type of aggressive commercial practices. According to the Authority, these offers could lead to a “deterioration of the levels of competition” in the mobile telephony market. The AGCM believes that the introduction of these offers could have a negative effect on the development of competition and could endanger the survival of new operators trying to enter the market.
In the weekly bulletin number 26/2023, the AGCM sent a series of reports to the Government regarding the measures to be adopted for the definition of the new Competition Act of 2023. Among these reports, the AGCM paid particular attention to operator attack offers in the mobile telephony sector. According to the Authority, the investigations conducted confirmed the existence of numerous offers differentiated according to the operator of origin. In practice, network operators generally offer lower prices to customers moving from new entrants, while offering higher prices or fewer gigs for customers moving to new entrants.
Sim card WindTre (pack)
Furthermore, the AGCM underlined that the practice of verifying the originating operator to activate the operator attack offers could lead to the improper use of the portability information collected in the database. This could allow major operators to market targeted offers based on which competitor the customer is from, a practice that is not available to virtual operators.
The AGCM highlighted that the introduction of these offers could have an extremely negative effect on the development of competition in mobile telephony. This could limit new entrants to the market and could cause other suppliers to exit due to unsustainable competition. The Authority underlined that the “competitive stimulus” has brought significant benefits for consumers and that it is necessary to introduce a specific law that prohibits this conduct.
In conclusion, the AGCM proposed blocking operator attack offers in the mobile telephony sector. This type of offer, which can only be activated through number portability by selected operators, could have a negative impact on the development of competition in the market. The Authority underlined the need to introduce a specific rule to ban these aggressive commercial practices and ensure a fairer and more sustainable competitive environment in the mobile telephony sector.