What is Unbundling

23 October 2009 |

Unbundling: The process of taking over a large company with several different lines of business, and then, while retaining the core business, selling off the subsidiaries to help fund the takeover.

Product bundling is a marketing strategy that involves offering several products for sale as one combined product. This strategy is very common in the software business (for example: bundle a word processor, a spreadsheet, and a database into a single office suite), in the cable television industry (for example, basic cable in the United States generally offers many channels at one price), and in the fast food industry in which multiple items are combined into a complete meal. A bundle of products is sometimes referred to as a package deal or a compilation or an anthology.

Recent Example:

NITEL faces unbundling -  Oct 22, 2009 If proposals to unbundle Nigeria Telecommunications (Nitel) yield results, at least five new telecommunications companies will come into being in this densely populated African country.
These plans follow suggestions by the Nigeria Communications Commission (NCC) submitted to the National Council of Privatisation (NCP) for consideration.

The ball is now in NCP’s court, and the telecommunications industry believes that a green light would be crucial to enhancing employment creation, service delivery and competition.

If approved, Nitel would be split into five telecommunications companies, comprising Long Distance Licence, International Licence, Infrastructure (MTel) and DML Licence.


Unbundling may occur when a company purchases another for its most valuable divisions (its crown jewels) with little desire for the other aspects of the business.

References:






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