ChannelVision Magazine

greater pricing and contracting flexibility,” said McKinsey. “Removing nationwide retail pricing controls was particularly important in a market where rates vary greatly, given the localized nature of competition.” Meanwhile, a carrier-neutral network operating company can enjoy a greater ad - dressable market. A structurally separated NetCo can grow its wholesale business with other operators, argued McKinsey, while ag - gregating demand from multiple wholesale customers increases household conversion rates for fiber and, hence, return on invest - ment for new builds. “In the O2 case, the carrier-neutral CE - TIN, untethered from its former parent, grew beyond its original business by adding sub - scribers and traffic from the customer bases of other operators,” said McKinsey. There’s also a potential upside for cheaper access to capital and improved financing options for an independently op - erating NetCo. Since a network operator primarily invests in infrastructure, it can focus on long-term investors who might be interested primarily in physical assets. On the other hand, potential ServCo in - vestments are better suited to investors looking for higher risk-adjusted returns, explained McKinsey. “As a result, the multiples for the two entities recalibrate in a way that increases their combined valuation,” said the re - search firm. Sticking with the demands of infrastruc - ture investment, McKinsey argues that a breakup also can better position a telco for the coming 5G world, and this may be the most influential factor in the near term. When considering the massively increased densification of urban areas and the result - ing heightened requirements on capillarity of fiber deployment, an independent and strong NetCo might be better positioned to support the industry’s need for fiber rollout than an integrated carrier. And perhaps even more importantly, “As a neutral party, it is also a natural orchestrator for the in - creased network sharing that 5G is likely to prompt,” said the research firm. INTERNATIONAL AGENTS Trusted Reliable Secure Hosted HTTPS FAX Take the Pain out of Fax Move to FaxSIPit SecureFAX-SDE + Mobile App We handle your Fax headaches Ask us about becoming a reseller! Your reliable fax delivery – powered by our expertise FaxSIPit Services Inc. | http://www.faxsipit.com | 866.374.6495 Get peace of mind with our HTTPS/TLS FoIP ATAs White labeled hosted platform Get HIPAA compliance & Ransomware Protection 36 CHANNEL VISION | March - April, 2020