To Spinoff or Not to Spinoff?

Should telcos spin off their wireless operations? This was the loaded question put to participants in the opening plenary panel session, "Global Communications Strategies," at the Supercomm 2002 show in Atlanta.

Loaded, because chairperson Scott Erickson ("I've had trouble with that name at my company"), senior vice president, sales and marketing, mobility segment at Lucent Technologies Inc., had panel members from both sides of the spinoff fence sitting next to him.

"We believe in the integrated connectivity model," stated John W. Sheridan, president of Bell Canada, which has opted to retain its mobile business as part of the parent company's operations. "We don't want to have just a wireless relationship with customers. We want to provide them with the fully integrated range of services they need, whether wireline, wireless, or satellite."

Continued Sheridan: "About a year ago we got our call center operations to cross-sell wireless services to our fixed service customers. As a result, 20 percent of all new wireless activations last year came from existing wireline customers. Pure wireless plays do not have that channel to market," he boasted, making mention of the "overheated market for wireless companies" that existed not so long ago.

Clearly, that "integrated connectivity model" was not for AT&T, which spun off AT&T Wireless Services Inc. in July 2001 and sold its remaining equity stake in the mobile player in December of the same year. So what does Andre Dahan, president and CEO of AT&T Wireless's mobile multimedia group, think of the integration philosophy? Not a lot, naturally.

"You need the focus of separate business units" in order to make the most of their potential, stated Dahan. "The customers will sort out the service integration issues for themselves," he added laconically.

And we are sure the customers will be delighted to do so…

— Ray Le Maistre, European Editor, Unstrung
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