The vertical integration of telecommunications has become anachronistic. This is the key point of the interventionCEO Tim, Pietro Labriolaon the occasion of the annual report of the Tim Oversight.
“The service sector is characterized by competitive dynamics that are incompatible with the time periods of recovery of infrastructure investments – explains Labriola – Our competitors on fixed assets have a price structure that is entirely marketed with infrastructure investments that are more limited than ours, as are mainly based on the purchase of wholesale services in our network “.
“On the contrary, until now we had to take into account the retail market but also the needs of the wholesale market, uncertain about the return on investment due to the high regulatory pressure – he pointed out – the reorganization of the Group should leads to a better balance between specific costs and benefits of the two activities: greater commercial flexibility for retail (ServCo) and greater predictability and stability of returns for Wholesale (NetCo) “.
The separation project
The CEO recalled that the separation project is based on industrial considerations and aims to create autonomous entities, more efficient and competitive than them, while remaining integrated into one company. “We are not separating ways to seek a‘ regulatory dividend ’where many projects in the past have been blocked – he said – however, it is in this order that new coordinated analysis of market access, launched by Agcom in 2020, will be required to take into account Tim’s new vertical separation model and its consequences in terms of simplifying the current retail and wholesale rules ”.
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For Labriola, the new regulatory cycle of the Authority will have to ensure the market and operators a system of rules that allows them to achieve the goals set by the European strategy “2030 Digital Compass: the European way for the digital decade” and not there. PNRR which predicts the 2026 targets of the “Italia 1 Giga”, “Italia 5G”, “Sanità Connessa” and “Connected Schools” Plans).
The role of OCTs and the sustainability of the Tlc sector
The Director General recalled that without the large investments of TIM and other operators, it would not have been possible to maintain the exponential growth of data traffic recorded in recent years on fixed (+ 100%) and mobile (+ 200%) networks. “Paradoxically, however, as is well known, these investments contribute to the growth of revenue and cash flow in the Ott in the face of a stagnation of the same KPIs of the Telcos – he stressed – the time to reach concrete solution for the need that also the Ott contributes to the salary of the costs of modernizing the networks thanks to which they achieve their profitable business model “.
The price war
The sustainability of the sector is further jeopardized by a market context where Tlc prices (fixed + mobile) in Italy have suffered the largest reduction among their peers (- 18% in the last 5 years; – 32% in the last 10 years yo). The situation is exacerbated by the current international situation “which has led to a significant and unexpected increase in inflation and the costs of raw materials (primarily those energy in which Tlc operators are among the largest users without benefit from the concessions intended for so-). are called energy-intensive businesses), “he said.
“Therefore, it should not be surprising if, as has already happened in many European countries, upward adjustments and price inflation in retail and wholesale TLC bids can be envisioned – explains Labriola – the sector’s priorities need to be reviewed compared to the past.industrial model, abandoning the price war and value destruction logic, aiming instead for premium value vs volume positioning strategies ”.
Trust in the future
That is why the challenge for the future is not only to define a new rule framework, but to understand how to guarantee the economic sustainability of this sector and to understand what its future is.
“The open table and the Mise is an important step and it is awareness that something must be done and immediately. It doesn’t make sense anymore to limit ourselves just to talk about the fixed, we need to define the boundaries between fixed / mobile and services in the Ott “, he said. On the front of consumer protection, the issue to be addressed is who has to pay the costs because blaming it on telcos is anachronistic. – he concluded
“Absurd, we are not asking for rules for everyone anymore but for a more simplified regulatory framework,” he pointed out. “In the analysis of the definition of costs or activities, by assessing the economic sustainability in the medium-long term of the operators in the new potential framework is anachronism. We are now in a context of faster evolution than in the past and decision and the decision-making process must be adapted.None of us expected to push the inflation that hit us, but it’s there and it affects our company’s income statement and Tim.We can’t ignore this and imagine an adjustment in wholesale prices “.
“It’s time for us to have the courage to make good decisions for the industry, for Tim and for our country,” he concluded.
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