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Vertical Separation

Vertical separation

A code for cord-cutting telcos?
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.


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

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