[The investigation] n the pace shrimp of the new management of Telecom Italy, after the about-face, compartment and late, on Metroweb, now is perhaps the time of reversing the unbundling. thorny and related topics. On Metroweb he had pressed unsuccessfully to Marco Patuano to the point of resignation. On the spin-off, three years ago, he definitely broke the mandate of Franco Bernabe. And as early as seven years ago had been the source output by the telephone group of Stefano Pileri, Head of Network, that the spin-off had begun to speak when the subject was considered an unspeakable taboo. Today the spin-off could be the last chance for Telecom out of the impasse in which he threw over a year of passive wait-and its French partner stronger. The defeat in the deal Metroweb is in fact a signal.
WITH SEPARATE INFRASTRUCTURE CAN BETTER MANAGE THE TRANSITION COPPER-FIBER, Stefano Carli follows from the first N ot so much in substance (after all it is a company that just 60 million bill) but because he says that the government has focused much of Enel to bring the country out from the uncomfortable place of bringing up the rear in the European ranking of ultra-broadband. And that consequently Telecom lost its centrality. What is in fact happened last Wednesday when CDP chose the offer of Enel Open Fiber for Metroweb? That from that moment it became official in Italy to cable fiber
will not just Telecom but also Enel. And there is a second consequence: that copper Telecom Italy has obtained Wednesday its precise expiration date: 2020. At the end of the plan Enel-Infratel Italy will be covered in fiber and over 50% of cases fiber will come from in users’ homes. The copper will be cut off. And with copper a good chunk of the value of Telecom’s network. If you were to remain as it is today. Side effects? The collapse of the value of the network would have an immediate impact on Telecom debt largely building shareholder of the network is guaranteed by the asset. And there would be consequences on the employment front, as OpenAccess, the division of the telco that precisely manages the network, is now charged with 26 000 units, many of which are used for maintenance, around Italy aboard their Panda painted with the red colors. Hence the hypothesis which is discussed more often among managers, analysts and experts in the sector, since there is nothing formalized. But it is considered by all a path to this point without alternatives. Why separate? The reasons are several. The market says a bit ‘of time that the competition in the telecoms no longer takes place on the roof but on services and their ability to generate traffic. So control of the network is no longer a strategic factor. They are moving in this direction mobile telco: “In the next five years, mobile operators will have to equip up to 300-400 thousand antennas for the new 5G networks: roughly ten times the current number. It makes little economic sense that each operator replicates an investment so large – explains Marc Vos, managing director of Boston Consulting Group Italy – In addition, the distinction between fixed and mobile networks are increasingly reduced: today already in Italy over 60-80% the originating from mobile data traffic passes on fixed networks via wiFi connections. All the next-generation mobile broadband will be made in close connection with the fixed fiber networks. ” In fact, the fiber under 400,000 of cellular antennas. And ‘one more reason against the copper maintenance: the data traffic generated by smartphones, tablets and PCs on the move can not linger on copper links. And then the network should be updated and the fiber should be extended more widely, far beyond the old Telecom program to stop as much as possible to the cabinets, which are 150 thousand. There is then, after the technological, financial reason: a pure infrastructure company, as it would be precisely the OpenAccess Telecom spun off, has fundamentals that can please a lot for investors: EBITDA margins that travel between a minimum of 30 and up to 50 %. On the other hand just look at the exploitation of another piece of Telecom, Inwit, the company of the towers for telephony, evaluated 15 times ebitda. Finally there is a regulatory reason for separation: both the government’s guidelines for the construction of the fiber in the market failure areas that the AGCOM guidelines in Italy and also in Brussels in terms of the regulatory Authority, tend to focus on subjects not vertically integrated. The direction is to prevent old incumbent, former monopoly where networks are highly integrated with the business side and the market, they can play catch-axes. Goes in this sense, the debate itself in recent weeks in Britain where operators without networks by Sky to Virgin to many mobile operators, asking the ultimate corporate demerger of BT network, especially after former British monopoly has returned to full title in the mobile operator with the acquisition EE few months ago. A Telecom Network separate corporately could move with less regulatory obligations and less constraints. It could also participate in Infratel tenders for the construction and management of fiber networks in areas C and D of market failure, using public funds allocated by the government, which instead now closed to Telecom as is. A further reason is inherent to its own operating costs and investment strategies. So far, to save copper management of Corso Italy has preferred a strategy to climb. It brings the fiber until the cabinets and there, a bit ‘at a time, and only where there is demand, advances toward the buildings and the homes of users. The thing has its rationality, only that in such investment has slowed so far as to convince the government to change horses and betting sull’Enel. And above all, graduation is not affecting the architecture of Telecom’s network. A more substantial shift to the FTTH, fiber to homes, however, would permit to cut off as much as 80% of the telephone exchanges that today are used chiefly in copper. With the fiber, where the signal does not degrade for kilometers, Telecom could close 8000 of its 10,000 plants, achieving significant savings in terms of investment in network equipment and maintenance costs. But the route for the separation is not easy and there are two big problems to solve that are called debts and employees. Closely intertwined with the definition of what will eventually be the value of the new network society. Given that the possible combinations are numerous and you can not be certain at this point, however, you can put some points. Today there are about 26 thousand employees in OpenAccess, the network division of Telecom which was recently merged with the Wholesale division, ie the one that sells wholesale access and traffic to other Italian telco, from Vodafone Fastweb by Infostrada in Bt, Tiscali and all other operators, and that should be the subject of the spin-. Of these a number between 5 and 7000 involved retail technical assistance, that is to end private clients, and are also specializing in assistance on modems, Tim Vision decoder and make the most of customer care activities that maintenance Real Network and own. But they are easily variable perimeters. The other thorny knot, and the debt, ie how much of the 28 billion Telecom debts will be carried on the network, it is the subject of thousands of possible alchemy. Meanwhile, what is the Telecom network? Three years ago there was talk of 15 billion, a figure which, however, contained a strong and prolonged copper evaluation. Today, with the greatly reduced copper prospects what of that figure? It may have remained more or less the same. “Copper is less valuable, in fact – Enrico calculates Lanzavecchia, director of Value Partners – but the total value of the infrastructure (ducts, pipes, back-haul, etc) has increased, as demonstrated by the doubling of Metroweb assessment, even net speculative component to the competition between Telecom and Enel. ” Yet it must be said that perhaps in the end, there is a copper part that will not be eliminated: it is the so-called “vertical copper” that goes from the ending of the cables in buildings and rooms in the houses. Also Enel Open Fiber will not matter, especially in newer homes where the counters are all on the ground or in the cellars. And that copper promises to be the real strength of Telecom: we assume a value of around 5 billion because its replacement cost will be very high. With a certificate worth 15 billion, how much debt could withstand the new company? “It depends on how the company will be attractive for investors or for a possible listing – sums up Paul Rizzo, of Anthilia partner and fund manager Anthilia Red. And from what Telecom could add to the assets of the new company. Sparkle and Inwit? They are companies themselves of infrastructure and would be workable hypothesis, although Inwit state can produce more value by itself “. But there’s still a variable to consider: though depends on the government. It is about changing the status of the classifying network company in all respects as a utility. “If society becomes like Terna – explained Lanzavecchia – then you can expect that the rules are the same as those applicable to Terna, with the rates fixed in order to allow recovery of the investments.” And ‘in fact what also happens to the highways or airports. One measure would push the genre further down the cost of investment, which might as well count on certain re-entry times. It remains the tangle of competing networks. It would be really an unnecessary duplication of investments and a waste of resources? Maybe not. Meanwhile, because the mechanism has effectively unlocked the situation, otherwise we would still be to scrutinize the intentions of Vivendi. And why, in the end, it is said that there will be two fibers to the buildings. Everyone expects that after an initial rush to show each other muscles of the two companies in the network find a shared approach. In a growing market like that of the fiber may be room for both companies. As in highways. And, with some differences, even in the railways, where for routes with higher traffic will have quadrupled the tracks. Nobody then prohibits CDP to also invest in the new company Telecom. And perhaps, at the end of the process, to merge them together. 1 2 3 Below, the CEO of Telecom Italy Flavio Cattaneo. Above Vincent Bollore (1) CEO of Vivendi Telecom’s controlling shareholder. Tommaso Pompei (2) to Enel Open Fiber. President Marcello Cardani AgCom (3) In the graphs the operating results of the Telecom Group in the main business components, and price performance on the stock market
