[CAnet - news] Structural separation gives the best ROI for telcos - Bears Stern

For more information on this item please visit my blog at 
http://billstarnaud.blogspot.com/
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[Here is an interesting analysts report from Bears Stern that argues
structural separation will unlock value and provide the best return for
telcos.  The argument is similar to that recently made by Bernstein Research
for the cable companies. They both argue there is little hope that the
telcos and cablecos will be able to compete on services and applications
given the incredible innovation, global market and financial resources
available to companies like Google, Joost, Microsoft, Amazon, etc

Both reports argue that telcos and cablecos should unlock the value of their
last mile assets through structural separation and focus on a solid
regulated return, rather than trying to compete in the highly dynamic
application and service space.  More importantly the entire business model
for the application/service industry is changing from fee for service to
other modalities such as advertiser driven, which work well with large
global markets, but are not practical on the small physical footprint of the
outside plant.

The biggest challenge for telcos is that the cablecos have a far superior
outside plant in terms of bandwidth and lower opex.  The telcos have to move
to providing raw fiber connectivity to customers with new business models if
they hope to compete with cablecos, as for example with Green Broadband.
Thanks to Dirk van de Woude for this pointer-- BSA]

Bernstein report for cablecos
http://www.bernsteinresearch.com/

Bear Sterns report for telcos
www.ccc.asn.au/files/pressrelease/paper_17.pdf

Green Broadband
http://www.canarie.ca/canet4/library/recent/Canadian_Heritage_Jan29_2007.ppt


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