Prague, August 31, 2015 – For many years, the most requested article from the Harvard Business Review was the 1990 classic “The Core Competence of the Corporation”. (TZ)
Its authors, Gary Hamel and the late C.K. Prahalad, made a compelling argument: Corporations should focus on only a few activities at which they can excel. This will enable them to access a wide range of markets with a central product type, significantly contribute to perceived customer value, and make it harder for competitors. As the 2000s turned into the 2010s, many telecommunications companies were still failing to embrace that lesson. They were (and are) attempting to add IT and business services to corporations specifically structured for telephony and network management.
It took an investment firm in the Czech Republic to break the trend. Just 18 months after the integrated mobile-fixed telco Telefonica/O2 was purchased in 2013 by the largest CEE-based asset management group, PPF, it was split in two. The retail operator retains the O2 brand and continues to provide fixed, mobile, and ICT services to residential and corporate customers. Newly formed infrastructure and data wholesale operator Česká Telekomunikáční Infrastruktura (CETIN) handles network planning, building, management, and development. This break represents the first time such a telco split has occurred voluntarily. It is also the first time such a split has included fixed and mobile networks. It essentially allows each firm to narrow its focus considerably, and should improve the prospects of both. Recent profit reports from O2 suggests this will be borne out. The operator reported a 54% leap in net profits and a 32.4% jump in EBIDTA for the first half of this year.
About IDC – IDC leads the ICT innovation discussion through events, research, and consulting. For nearly five decades it has been giving ICT and business professionals data and insight for making strategic and practical decisions. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.