Tuesday, September 12, 2006
Time to unwind
I assume that TI's move to separate mobile and fixed subsidiaries after waving the banner of integration so avidly will prompt some to speak of the failure of FMC strategies and the inherent impossibility of overcoming legacy organizational silos within incumbent telcos. I'm not sure that I would necessarily rush to read across from Telecom Italia, which I think is a unique case in terms of capital structure and its home market, into any other incumbent telcos. There are too many layers of complexity to this story. However, one thing that does seem to be validated by this proposal is the concept of the separate LoopCo (as pioneered by BT, albeit under duress), both as a short-term regulatory lubricant to speed time to market for new products, and (in my view) as a potential long-term regulatory inevitability for the sector as a whole in Europe.