In one of my briefings with a leading vendor last week in Milan, I asked them if they had a strategic response to the eventuality of one of more incumbents going bust in the next five years. Their first answer was that yes they considered that eventuality but weren't too concerned about since after all – even if that happened – the assets would remain, be bought and equipment would still be needed to poer said network.
Furthermore, one of their executives added, most if them are hugely profitable right now so, in his own words, he wasn't losing sleep over that eventuality.
It's not like I didn't know that, but it made me realise how much, despite the "neutral" and "rational" stance that you have to adopt as an analyst, you can be influenced by the constant whining of the incumbents on net neutrality.
There was an article in Capital.Fr in France last week (Quels vantards, ces opérateurs!) that very clearly stated how the telcos in France (incumbents or otherwise) are screwing their customers by selling broadband speeds considerably higher than what they actually deliver. There was a very interesting figure in the article: overall margin for the sector is 17.4%, the same as the luxury goods sector. So how comes they pretend they can't invest?
Maybe I need to change my own rhethoric. Don't get me wrong, I still think many incumbents are dealing with the access revolution absurdly, and I am more than ever convinced that their historical model will have to change or break. But I also realise that they use the assessment of analysts such as myself to weep and moan so much that people (especially politicians) end up believing that they need help.
French minister Eric Besson earlier this week launched an unprecedented assault on net neutrality by stating that the model had to rely on a tax paid by content providers to network owners. It strikes me that he is actively defending the elephant against the mice, and that's just plain wrong...