ChannelVision Magazine

T raditionally thought of as a tool by which government regulators address per - ceived advantages or inefficiencies of one entity dominating a marketplace, structural separation as a voluntary strategy is beginning to attract interest among telco stake - holders around the globe, argue McKinsey & Company analysts, as they face new financial and market pressures. As it turns out, “Sometimes the whole is less than the sum of its parts,” said a McKinsey analyst team. The support around structural separation – such as splitting a telco operator into two freestanding businesses: one that operates the network (the NetCo) and the other a customer-facing entity (the ServCo) – centers on the ideas that “resulting units will perform better by clarifying management focus and improving capital allocation, given the funda - mentally different nature of these two businesses,” explained McKinsey analysts. “The hope, also, is that such a move will create a market structure that requires less regulatory intervention.” By Martin Vilaboy Better to Break Up? The potential value of voluntary structural separation INTERNATIONAL AGENTS 32 CHANNEL VISION | March - April, 2020