Two European operators last week delivered contrasting messages on convergence.
While Vodafone signed a deal for fixed-line broadband, Telecom Italia decided to split its fixed and mobile businesses. Only one of them can be right about fixed-mobile convergence, right‾
And that one is Vodafone, surely‾
Yes, Vodafone's strategy is your orthodox positioning for the future world of triple- and quad-play. Like most leading operators, it aims to make sure that it can reach its customers no matter what platform they are using.
Last week it announced that it will lease wholesale broadband capacity from BT. Its progress in what is an entirely new business for Vodafone will be keenly watched.
As for the TI move, analysts assure us it was merely financial surgery by a company that has been sorely testing the patience of investors.
But that's not to say there's not a convergence lesson in the split, which ironically takes the Italian incumbent back to its structure of the tech go-go years.
Worst fear realized
The problem for chairman Marco Tronchetti Provera is the operator's $51 billion in debt, not to mention a share price that has halved in his five years in office.
Pyramid Research senior analyst Nick Holland says TI is aiming to reposition itself as a media company, with the aim first of disposing of the mobile arm to cut its debt.
The attraction is simply that media firms are today valued at a higher multiple than telcos - Google, Yahoo, to name some obvious examples, are media companies rather than Internet plays.
This idea touches a deep nerve among telecom leaders, a sign of their worst fear realized - commoditization. For the last decade and a half, Convergencehas had dialogs with them about this. "We want to be more than just a pipe," is the common refrain.
If you want to understand what drives telecom executives, and the whole telecom industry today, this is it. It's that fear that has driven carriers into broadband TV and music and all the rest of it. It's sparked off the whole "Net neutrality" imbroglio, as carriers have sought to mandate tiered pricing in the face of evaporating voice revenues.
Yet it is one thing to identify media as an opportunity. It's another to get into it.
In another telling development last week, News Corp paid $187.5 million for 51% of ringtone company Jamba, the firm behind the Crazy Frog ringtone.
It's significant because News tends to turn up late to tech parties, but has the knack of choosing the right parties.
Last year, Murdoch bought social networking site MySpace. Web 2.0 and the whole social networking craze has become the hot trend of 2006.
It remains to be seen whether Vodafone and TI have Murdoch's smarts in picking a winning strategy.
Robert Clark is Telecom Asia Editor at Large [email protected]