3 Italy introduces ‘free’ pre-paid videophone

23 Sep 2003

The race to sign up third-generation mobile users in Italy is hotting up. Hutchison Whampoa’s local unit H3G, which operates under the banner 3, has launched a ground-breaking new pre-paid option, Tua, which includes a free videophone handset and the option to periodically upgrade to a new model with no additional charge – as long as they reach a pre-agreed usage threshold. As the company struggles to make its target of signing up a million users within the first year it has introduced what amounts to an innovative subsidised pre-paid pricing model. To join the free handset plan, Tua customers will have to pay a one-off fee – set at EUR99 until the end of October – and be the holder of a valid credit card. In return they will receive ‘exclusive access’ to the cellco’s low-cost tariff plans, and avoid paying a charge of EUR30 per month provided they reach a threshold of EUR30 of telephone traffic and services in a calendar month, and provided they also receive a minimum of 60 minutes of voice and videocalls. 3’s chief executive Vincenzo Novari said the pre-paid package marks a revolution in the provision of wireless services by abolishing ‘one of the last dogmas of mobile communication in our country: the fact that one must pay for a cellular phone’. Alternatively, customers who purchase their videophone outright will have no monthly usage quota, but will receive a catchpenny in the form of an automatic top up of EUR30 (or a discount on their bill) if they hit the EUR30 threshold. However, they will not benefit from the free videophone upgrade offer.