What is Functional Separation

Establishment of independent units operating different activity branches. The separate entities belong to the same ownership, but provide separate accounts, have independent incentive schemes for managers, and face limitations in the circulation of employees and information. It is an “intermediate” regulatory measure, lying between the two extreme forms, accounting and ownership separation.

Vertical Integration in Telecoms

Clementina Bruno (University of Piemonte Orientale and HERMES, Italy)