Omnitel Pronto Italia, Italy’s privately owned GSM operator, said it has filed a lawsuit against state-owned Telecom Italia Mobile for $62.5 million with the court of appeals in Rome.
Omnitel said TIM has used a system of exclusive distribution agreements with cellular dealers to sell Global System for Mobile communications service.
TIM already had been sanctioned by the Italian Antitrust Authority on May 2, which was confirmed by a ruling of the Regional Administrative Court Latium on July 3, said Omnitel.
“If free market competition must be defended in the courts, we are ready to do so,” said Silvio Scaglia, chief executive officer of Omnitel.
“The illegal clause contained in TIM’s dealership contracts has caused considerable damages, and these must be paid. In addition, our company had to set up an entirely new distribution network requiring significant investments.”
Cellular phone competition has been unwelcomed by TIM, which formerly operated the country’s only cellular network.
The state-owned operator has taken Omnitel to court more than 10 times during the last 10 months and has lost every case, said Omnitel.
Omnitel said it filed for $240 million in damages in March with the court of appeals in Rome after TIM refused to activate national roaming. The Regional Administrative Court of Latium Nov. 7 rejected TIM’s appeal calling for the annulment of the Italian PTT ministry’s decision to allow Omnitel to launch its commercial service and ordered TIM to activate roaming.
TIM also claimed Omnitel had not reached the 40 percent coverage that was required by the PTT ministry when it launched commercial service last December. The Regional Administrative Court ruled that the claims were unfounded and that the ministry carried out the necessary verification on the data and the methodology used by Omnitel to prove it had reached 40 percent coverage.
“TIM’s systematic and instrumental use of [court] appeals has the objective of discrediting Omnitel, thus weakening our image in the marketplace. We will continue to safeguard our rights,” said Scaglia.
“Unable to accept the rules of free competition, the former monopolist continues to behave unfairly. Under these conditions, Omnitel’s success is even more substantial as the company has built a large GSM infrastructure in just a few months and has captured a 35 percent share of the Italian GSM market despite the fact that TIM launched its GSM service eight months earlier.”
Omnitel announced it had 560,000 subscribers on its GSM network last month.
