Monday, September 11, 2006

CONVERGENCE://TI spinning off TIM?

Telecom Italia, according to Reuters and the WSJ, is planning a daring restructuring and a complte u-turn. It seems highly unlikely, unless TI thinks both fixed and mobile could be full-service providers (based on structural separation and WiMAX respectively). A far-fetched kind of multi-brand strategy. In short:
  • Sell-off TIM and TIM Brasil
  • Structural separation (but no sell-off of the fixed network yet)
  • Content deal with Sky Italia (News Corp)
  • Focus on fixed is a departure from convergence strategies adopted almost everywhere, even at a wireless company like Vodafone. Exceptions: Sprint Nextel and Alltel (selling off Embarq and Windstream/Valor). But Sprint has WiMAX as a fixed-line replacement.
  • Focus on IPTV seems to place TI head to head with other TV providers: satellite, free TV and FastWeb.
  • Structural separation would be a long-term solution to regulatory issues.
  • TI could still include a mobile component by sealing an MVNO deal with TIM before the spin-off.
  • TIM could enter the fixed/BB market through a merger/acquisition or by launching WiMAX/WiBro.

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