The economic-financial performance of NTV in a market – high-speed rail – characterized by two-digit growth rates seems to violate one of the most fundamental axioms of marketing: “When the market is buoyant, even turkeys fly”.
The responsibility for the disappointing performance is traced back, in the Company's explanations, to the paroxysmal obstructionism of the former monopolist competitor (who is also the owner and manager of the Network on which NTV operates) and to the absence of a Regulator (the Transport Authority has just been established) capable of imposing and enforcing "fair competition" rules. It is worth examining such explanations closely. Examples of successful liberalizations carried out in our country in the absence of Rules and Regulators and in spite of the fierce opposition of the monopolist exist: Omnitel in 1994, before the establishment of Agcom and with the need for NTV to use the incumbent's network, is a good example of this.
The difference lies in the different ability to foresee (and obtain approval from the competent Ministry) the regulatory framework suitable for carrying out an "effective competition". When - in the NTV case - a competitive model is adopted "in the market" and not "for the market" as in the sophisticated UK model, it is necessary to define a highly asymmetric set of operational-economic rules to guarantee a minimum balance with the former monopolist, which benefits from economies of scale and scope, as well as a deep-rooted product/service culture.
On the other side of the balance, the "new entrant" must weigh the advantage of being able to build a company with a leaner cost profile, starting from a "green field", of being able to choose the routes to operate as a priority, and a innovative marketing. Yep, marketing. How does NTV positioning differ from the competitor (aspirational, service leadership, price leadership, other)?
Surprising, considering the lineage of the founding partners in the matter in the common perception, such an evident lack. There is a lack of market and consumer support for opening up to competition.
It all boils down to economic data that show a contribution margin (or added value if you prefer, 2013 data) of 6%: a capital-intensive company like NTV instead needs high profitability margins to support the weight of investments. Here it is the structure of the income statement that leaks: the magic of the financial alchemists at work risks having only the palliative effect. The story is that of a lack of supervision of the strategic/regulatory and marketing variables that mark the success of a company. Focusing on the problem of running trains, when running a railway transport company, is commendable but not decisive.
"Listening to buffoons and scoundrels" is one of the (many) leadership lessons of the Bard: that is, it is necessary to give space to unconventional thinking when a market opens up. It doesn't appear to have been done. How to get out now? The easy way out is "I hope I manage": debt restructuring, capital increase, revision of some regulatory aspects, a little political help. It offers the extraordinary advantage of not having to admit or decide anything: an extraordinary saving of time waiting for the blue fairy.
The main road, on the other hand, would be that of a rethinking of the initiative, drawing inspiration from the mistakes made. After all, it is not easy to admit that the "parterre de roi" constituted by the NTV shareholder base should admit defeat in the face of a monopolist. We need to find other ways. There is talk of a merger with the high-speed train FS in a new corporate structure: but in this case it would be necessary to admit the failure of the liberalization with the consequent reputational damage for the participants in the company. The route of "offloading" the weight of the initiative onto a strong partner - SNCF - or another European partner - capable of supporting the Company, perhaps in the face of a greater opening up of the Italian regional transport market and of a minimum of reciprocity on the French market, as claimed by FS for some time.
This would give the advantage of being able to propose itself as liberalizers in as many as two geographical markets at a national and regional level, discoloring the problems of the performance of the original Italian initiative. Indispensable in this path (not by chance but "pour cause") is political support, a terrain on which many great Italian entrepreneurs willingly compete, more accustomed to drawing-room minuets than to the harshness of the market. It's no big deal; but after all, after much debate on the rigidities and costs of the world of work, sooner or later we will have to ask ourselves the problem of the average quality of the Italian entrepreneurial class.
