The 3 Italia mobile network was this week due to offer Sidney Pollack's The Interpreter to customers for around $10.50 (nine euros) for unlimited viewings.
The proposal led to protests from Italy's exhibitors with threats to withdraw 200 prints of the film distributed locally by Eagle Pictures.
According to figures released by Cinetel, which monitors around 75% of the country's screens, 161 screens did actually remove the film last weekend.
As a result, The Interpreter opened second in Italy in its first week but last weekend it dropped 70%. So far, the film has grossed $4,663,352 at the local box office.
Earlier this year, some German exhibitors took a similarly tough line, refusing to screen Herbie: Fully Loaded in protest at a shortened release DVD window.
Eagle's head of theatrical, Ernesto Grassi, has since thanked exhibitors "who did not withdraw the film last weekend" and appealed to others to put the film back on screens.
"I hope other national and international exhibitors will now start screening the film again.
"The film has done very well so far and it has maintained solid results despite protests by those who have withdrawn the film following the press reports," Grassi said.
Nevertheless, the Rome and Milan-based distributor has released a press statement suggesting that it has not been intimidated by the protests and still hopes to release films on mobile phones in the near future.
"We have not yet signed a deal with mobile phone operators and have therefore not given the greenlight to any such project," Eagle said, implying that it has not altogether shelved plans to do so.
In the meantime, the polemics between Eagle and exhibitors look likely to continue. Eagle said it now plans to "seek compensation for the damages the company has incurred due to behaviour that is not in line with market rules."