“The knots have come home to roost, the telcos are in the middle of the storm and it’s no surprise. We have been discussing the issue at Telco for Italy for years and we are at the showdown”: Andrea Rangone, president of Digital360 was among the first to raise the alarm for a decade now but “we must not give up and we must find the way out of the crisis and regain competitiveness”, this is the hope.
President, how to get out of this?
The theme is this: investments must be made, there is no doubt, but the margins are too narrow to guarantee sustainability. And it has been like this for years. The spotlights are on the infrastructural issue but we need to broaden our horizons otherwise we won’t get out of it. Telcos cannot continue to configure themselves primarily as carriers: value-added services have been launched in B2B, for example on the cloud and cybersecurity front, but these initiatives are still too weak to gain a foothold on the market which would allow the trend of degrowth. Partnerships are not enough, and investments have not been courageous net of some sporadic initiatives: strong operations are needed, for example through acquisitions but also in terms of open innovation for a revolution that starts from the inside and then goes outwards.
But there is no money to invest.
There aren’t enough of them but those that do exist need to be steered in the right direction. The telcos continue undaunted to wage war on prices: this demonstrates a lack of industrial and managerial vision. tariff competition leads nowhere, it is the simplest lever but the one that inevitably destroys the value of the entire supply chain.
Consolidation, is it time?
In reality, the consolidation should have already taken place a long time ago. But the biggest mistake was made at the level of authority, primarily the European Commission which was more realistic than the king, even more liberal and liberal than the Americans and British, making the operators proliferate instead of favoring their reduction and unification. A measure that would have also and above all allowed to give life to European champions. The price war would never have started if the competition had been between fewer players. Now what to do? Are you thinking about subsidy mechanisms? To involve other subjects in the infrastructure? And for how long? An intervention on the issue of tariffs through, for example, pricing mechanisms on the model of those of other utilities such as energy and transport is more than desirable, in order to restore oxygen to the telcos. The telcos have ended up in a vicious circle, an intervention from above at this point seems almost inevitable.
In the meantime, the disaffection linked to poor quality of offers, disservices and unwanted calls is growing. The Privacy Guarantor has taken the issue of wild telemarketing seriously to heart and in recent days has imposed a series of heavy fines. How to regain consumer confidence?
If you don’t invest in innovation and in the development of services, if you have a monstrous debt and have no margins, it is clear that the consequences will affect consumers in terms of quality and workers in terms of employment and therefore layoffs. He’s mathematician. But consumers must also be re-educated: one cannot expect free gigabytes, unlimited minutes and so on and at the same time expect quality assistance and the functioning of services. The real challenge is to make consumers understand that quality and price are two closely linked factors and that tariffs in Italy are among the lowest in the world: how come consumers know well, for example, the difference between a low-end mobile phone and one of top of the range and are willing to spend over a thousand euros for a smartphone but then think that the internet connection should be almost free? Can not run.
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