Telecoms: Italy

Fixed-mobile convergence, “one company” model, multi-platform content delivery, … Telecom Italia was just kidding. The new stategy of the Italian incumbent is to sell its mobile subsidiary TIM (Telecom Italia Mobile), that was merged into the main company less than two years ago with much fanfare about synergies and “strategic advantages” of the fixed-mobile convergence.

The management team of Telecom Italia changed its mind and it now advocates TV and broadband convergence. As part of a new strategic plan due to be officially detailed tomorrow, Telecom Italia will sell TIM Italy (market leader in Italy with over 30 m mobile subscribers) and TIM Brasil. Moreover, Telecom Italia will spin-off its domestic network, although it will not sell it, in a move to please the regulator. Finally, Telecom Italia wish to invest more in content and media to be delivered both through its traditional television channels and through IPTV and broadband networks.
The strategic rationale of this sudden U-turn is hard to understand. The only clear goal seems to be the need to ease the massive debt burden of the group through the sale of its most profitable business: mobile telephony.