is an extreme case. Yet its move reveals a lot about where Europe’s hyperfragmented telecoms industry is headed. America and China have less than a handful of operators; Europe has more than 100. Though some are local subsidiaries of larger companies, they still compete in a patchwork of national markets. If more European operators follow’s example and split their fixed networks from their other assets, as seems likely, this “delayering” may, ironically, be the first step towards consolidation.
As a result of all this, the sector’s return on capital employed has since fallen from a healthy 18% on average to a paltry 8%, according to New Street. Although they have managed to string plenty of fibre-optic cables all the way to people’s homes, including to remote villages in places from Sweden to Spain, their low returns may have kept them from rolling out 5mobile networks as rapidly as counterparts in America or China.