Italy's TIM Aims High with Europe Net Portal Plans

ROME (05/03/2000) - Telecom Italia Mobile (TIM) SpA today presented a range of Internet services which the telecommunications carrier said will help Italy close the gap between the country and its most technologically advanced competitors. The service will exploit widely available cellular phone handsets as an access medium to the World Wide Web.

TIM's interactive services, grouped under the brand name i-TIM, will help to transform the mobile phone into the principal instrument of personal communication in the world, an upbeat TIM Chief Executive Officer Marco De Benedetti told a press conference here today.

"I am convinced that we have the opportunity to bridge the information technology gap caused by the low diffusion of personal computers in Italy by taking advantage of UMTS (universal mobile telecommunications system) cellphone technology," De Benedetti said.

"UMTS is the final objective from our point of view, because it allows the true integration of data, voice and, above all, images. But we are not waiting for UMTS, there is a lot that can already be done today," he said.

TIM will be bidding for a UMTS license in Italy, where the company is the country's largest mobile phone operator. The carrier has already won a UMTS license in Spain, the first 3G (third-generation) mobile license to be issued in Europe. TIM intends to bid for similar licenses in France, Austria and Greece and other countries where it already has a presence related to the GSM (global system for mobile communications) standard, De Benedetti said.

Italians have been slow to take to accessing the Internet via their personal computers, partly because many of them don't yet own a PC. In contrast, Italy has the largest mobile phone subscriber population in Europe. There were 33.7 million mobile subscribers in Italy at the end of March and that figure is expected to reach 42 million in 2003.

But the pace of growth is beginning to build on the PC front as well: some 20 percent of Italian households now possess a PC and, by 2003, 28.7 million Italians, or roughly half the population, will have surfed the Internet at least once, according to a study by market researcher International Data Corp.

(IDC).

TIM's Easybuy service will soon make secure mobile commerce (m-commerce) available to the company's 19 million subscribers, De Benedetti predicted. A wide range of products will be advertised with an "Easybuy TIM" logo and accompanying producer and product code to facilitate cellphone purchases, the company said.

Using a Superpower 32kK GSM SIM (subscriber identity module) card, customers will be able to activate the m-commerce service and choose whether to debit purchases to their credit or payment cards, TIM said. An agreement with the Telecom Italia Group's online Yellow Pages company means TIM customers will have access to a huge range of products in the equivalent of a giant online shopping mall, company officials said.

"The mobile phone will become, thanks to i-TIM, a permanently available electronic wallet," TIM said in a prepared statement. Customers will also be able to use their cellphones to pay utility bills, with purchases and payments confirmed by SMS (short message service) messages or e-mail, the carrier added.

TIM's international strategy is to concentrate its efforts on western Europe, the Mediterranean basin and South America, De Benedetti told today's press conference. Last month, the company won a license to become Turkey's third GSM operator, bidding a total of US$2.5 million -- $1 million more than its competitors -- for the privilege. "Turkey was the final piece of the jigsaw," De Benedetti said. "We succeeded in discouraging others from bidding, and the gamble paid off. We were clever."

TIM has recently created a B2B (business-to-business) e-commerce platform to handle relations with the company's 5,000 Italian dealerships, and it plans to extend the service to external customers, General Manager Mauro Sentinelli told today's press conference. "Our objective is to become Europe's biggest B2B e-commerce center by the end of the year, handling 50 million euros ($45.4 million) in trade per week," Sentinelli said. "We will sell our payment authentication process to other companies that want to use it."

Within a year, TIM will add Bluetooth local wireless technology to its SIM cards that will allow its mobile phones to interact with bank ATMs (automated teller machines), Sentinelli said. Money transfers, the payment of bills, the buying and selling shares and the recharging of prepaid phone cards will all become possible through the use of a phone handset in the vicinity of an ATM, he said.

"We will create customized SIM cards for some banks, so that the system will transport the client directly to the bank's Web site," Sentinelli told reporters. "TIM does not want to take the place of the banks or the credit card companies and it doesn't intend to seek a banker's license. It wants to collaborate with the credit system and transport it toward the information society."

TIM has decided to give companies free access to its WAP (wireless application protocol) gateway, Sentinelli said. "We have made a strategic choice in favor of an open system," he added.

These innovations put Italy in the forefront of technological development, alongside Sonera of Finland and NTT DoCoMo of Japan, one of TIM's technological partners, the TIM general manager said. "Italy can arrive at Internet via the mobile phone. NTT DoCoMo has shown that that is possible," Sentinelli added.

The Japanese cellphone company's 4 million [M] plus clients received an average of 2 e-mails on their mobile phone per day and sent an average of 1.2 e-mails themselves, he said. They had the chance of contacting 160 banks and 5,600 WAP Web pages and using 10 search engines. Japanese clients used their mobile phones to visit an average of 10 Web pages per day, Sentinelli said.

TIM's success in introducing Italians to the delights of the Internet via the mini displays of their cellphone handsets will depend crucially on the simplicity and convenience of the services offered, according to Roberto Mastropasqua, head of telecommunications and Internet research at IDC in Milan.

"The prospects for e-commerce are very encouraging in Italy. In theory, there is every reason why TIM should be successful," Mastropasqua said. "Security, quality of service and the reliability of the vendors: these are the fundamental elements."

Mobile online share trading has already shown promising results and the purchase of products connected to mobility -- such as airline tickets -- is also well suited to m-commerce, Mastropasqua said. But other products that users are unlikely to buy in a hurry while on the road, such as a car or a television set, are less likely to find purchasers over the mobile network, he said. Surfing the Web will never be as easy from a cellphone as from a PC and the majority of impulse buyers are likely to be conventional PC-based surfers, Mastropasqua added.

"The market will have to be carefully segmented and it will be up to TIM to make the service as simple and user-friendly as possible," Mastropasqua said.

"Our figures show that in Europe not more than 15 percent of the population is currently prepared to make a purchase online."

For TIM's Sentinelli, however, the prospects are enticing. "The cellular network will become one great distribution network for products and services which transmits voice services in its spare time. The current situation will be completely inverted," he said.

TIM can be contacted in Rome, Italy, on +3906-3900-2491 or on the World Wide Web at http://www.tim.it/.

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