Iliad joins the Italian convergence race

Only a matter of days after Sky Italia expanded its offering, Iliad has inked a broadband wholesale agreement with Open Fiber to drive towards the convergence dream.

While the convergence business model, bundling together several services into a single ‘product’, is one which is proven uptake has been slightly staggered. This is primarily because it is an arduous and complicated job to move all the pieces into the right place, but it does appear progress is being made in the Italian connectivity market.

Earlier this week, Sky Italia confirmed it had expanded its broadband footprint to more than 120 towns and cities in the country, and now Iliad has ventured into the multi-service, multi-product dreamland. The deal will offer Iliad access to Open Fiber’s FTTH network in 271 towns and cities throughout the country. At the end of 2019, Open Fiber had more than 8 million homes passed.

“The collaboration with Iliad, which chose Open Fiber for its entry into the fixed market, is further confirmation of the validity of the neutral Open Fiber model,” said Elisabetta Ripa , CEO of Open Fiber.

“Iliad has brought transparency, simplicity and clarity to the world of telephony by building a solid and trusting relationship with its users,” said Iliad CEO Benedetto Levi. “These are values ​​that our users ask us to bring also in the fixed network segment.”

The concept of convergence is simple. Firstly, cross-selling additional services to existing customers is much cheaper than continually acquiring new customers in a single product line. Secondly, customer service and personalisation features can be streamlined and more effective. Building on these points, service providers are valued more by customers and loyalty is increased.

It is a simple idea, but it is a slow burner. Creating new services, either through network deployment or partnering with a wholesaler, takes time, as done engaging the market and setting up all the relevant business processes. There are plenty of moving parts, but this is a long-term payoff which is being realised by numerous companies, Sky in the UK or Orange in France and Spain, for example.

Iliad seemingly sees the value and is pushing forward in Italy. Interestingly enough, this might act as a catalyst across the market.

Iliad is a disruptive force, this is evident with its heritage in France, where data prices are now some of the lowest in Europe as a result, and its entry into the Italian market in 2016. Iliad likes disruption and often forces rivals to evolve as a result. The same could be seen in Italy, which would certainly be an encouraging path for the industry.