Belgacom may go for wholesale market consolidation (Belgium)In the whole sale sector Belgacom International Carrier Services (ICS) calls for a reduction in the number of players. According to Daniel Kurgan, CEO of Belgacom ICS, Economically there is a need for consolidation in this business. It should be the objective of every carrier to create the best platform they can and drive volumes while keeping their cost base as flat as possible, he said. Considering the scenario of the market, as the market remains crowded, prices will continue to decline, even though the rising number of new services coming to market this implies that the business of providing wholesale services is becoming more intricate. To help wholesale carriers streamline their costs and stave off a growing price war across the industry consolodation is needed. He also claimed that most operators subsidise their wholesale voice operations with their retail divisions. This model is not sustainable in the long term, he said. There are some obsatcles to this consolidation:
Lack of Transparency in the business
Non-Economic Barriers
Kurgan mentioned the importance of implementing clear governance and decision-making processes following a merger in order to meet the needs of customers and therfore reponding apidly to rivals and to other market forces. I believe that consolidation is the future. It will generate value for shareholders, better services for customers, and will position carriers to take advantage of possible synergies during future rounds of consolidation, Kurgan added.
