ChannelVision Magazine

INTERNATIONAL AGENTS A separate McKinsey 5G survey found that 93 percent of chief technology offi - cers expect increased network sharing to occur with the onset of 5G. Finally, separated entities tends to lead to a sharpened focus among the respec - tive managements. By separating a NetCo and a ServCo, for example, decision mak - ers can direct strategy and budget square - ly on the specific needs of each company without considering the impact on the other side of the business. In the case of O2, McKinsey pointed out, “the increased fo - cus for management translated into higher customer satisfaction ratings for CETIN and a faster buildout of O2’s O2 TV.” Likewise, investment horizons differ between the two eventual entities. Where a NetCo usually plans in 10- to 15-year time frames for infrastructure invest - ments that can last for 50 to 100 years, a ServCo may work with one- to three-year investment cycles for commercial activi - ties, such as marketing campaigns and promotions, McKinsey analysts argued. Of course, the analysts are fully aware of the high-stakes risks of a voluntary breakup, particularly if managed poorly or under the wrong preconditions. The strat - egy could also backfire. “By giving up their network owner - ship ServCos could, for instance, face higher transaction costs in their day-to- day dealings with the NetCo,” said the firm, while also losing other once-inher - ent advantages. That could include pref - erential treatment in fixed deployment through price differentiation or opera - tional integration with a NetCo, the lack of control of certain types of product development that require deep integra - tion into the network and lost power to direct NetCo investments into areas that benefit the ServCo. At this point in time, it’s hard to imagine any large U.S.-based telco willingly break - ing up its business outside of a merger concession. But these are disruptive, if not unprecedented times, and unique times call for unique measures. o Your regional Pacific Northwest network partner. Blackfoot Carrier Services Seattle Noxon Kalispell Missoula Hamilton GreatFalls Helena Butte Anaconda Bozeman Billings Townsend Forsyth St.Anthony AmericanFalls Dubois Sheridan Casper Worland Gillette Riverton Sundance ToChicago ToChicago Denver Cheyenne Diverse, redundant network routes. Blackfoot is your trusted network operator, employing industry best practices to meet stringent SLAs. We leverage fiber and RF to accommodate topography and time-to-market considerations. 30,000 service locations. 866-541-5000 | Blackfoot.com/Carrier 37 March - April, 2020 | CHANNEL VISION