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Vertical Separation: A Code for Cord-Cutting Telcos?

  • Report

  • 34 Pages
  • July 2019
  • Region: Global
  • ID: 4807995

No longer just a regulatory ‘punishment’, there are good business reasons for separation.

This report reviews the concept of vertical separation and its changing role for the telecoms industry.

‘Vertical separation’ encompasses different concepts, ranging from rather mild reporting requirements to full ownership separation. The report shows that the concept is not unique to telecoms, but has been implemented in a great many industries.

Within telecoms, vertical separation was long considered a regulatory remedy for those cases where a dominant operator discriminated unduly against its rivals. The report sheds light on the main drivers of separation, and how they are changing this situation and are making vertical separation a reasonable business strategy for operators.

A number of case studies will illustrate the approaches already taken by several operators towards separation and how the current trend is evolving towards voluntary separation.

A conclusion wraps up this report.

Table of Contents

1. Executive Summary

2. Introduction
2.1. What is vertical separation?
2.2. Flavours of separation

3. The relevance of vertical separation
3.1. Vertical separation is already practised across all network industries…
3.2. …and is discussed time and again for big tech

4. Separation drivers
4.1. Vertical separation: from stick to carrot?
4.2. The reason why the Code favours vertical separation
4.3. The well-managed quality of service of wholesale products facilitates separation
4.4. A promising long-term investment

5. Separation cases
5.1. Openreach
5.2. TDC
5.3. TIM: from ‘voluntary’ functional separation to voluntary structural separation?
5.4. CETIN/O2 CZ: the first operator to implement truly voluntary separation
5.5. Vertical separation is not a ‘fixed-only’ phenomenon

6. Wrap-up
6.1. Separation sees the convergence or combination of three essential forces
6.2. Telcos should explore the separation option

List of tables and figures

  • What is vertical separation
  • The differing extents of separation
  • Some European industries – railways are an example – are already well advanced
  • From regulatory ‘nuclear option’ … to sound business decisions
  • Europe trailing US investments levels
  • Open access wholesale model
  • Ladder of investment
  • Network slicing in mobile
  • Trends in the share prices of O2 CZ / CETIN
  • BT Wholesale / Openreach catering to CSPs
  • Ofcom assessment of Openreach separation
  • De-branding of Openreach vans
  • TDC Nuuday and NetCo
  • TDC separation approach
  • Telecom Italia Open Access
  • TIM divestment considerations for Elliot
  • TIM Management Plan 2018
  • TIM / Open Fiber considerations
  • CETIN separation
  • Trends in O2 CZ share prices
  • CETIN EBITDA and EBITDA margin
  • UK cell site operators
  • Alignment of major forces for separation


Companies Mentioned

  • CETIN/O2
  • Openreach
  • TDC
  • TIM