{"id":1104649,"date":"2024-05-06T06:48:21","date_gmt":"2024-05-06T06:48:21","guid":{"rendered":"https:\/\/www.capgemini.com\/in-en\/?p=1104649&preview=true&preview_id=1104649"},"modified":"2026-01-22T07:58:00","modified_gmt":"2026-01-22T07:58:00","slug":"telecoms-delayering-successfully-navigating-the-journey-to-servco-and-netco","status":"publish","type":"post","link":"https:\/\/www.capgemini.com\/in-en\/insights\/expert-perspectives\/telecoms-delayering-successfully-navigating-the-journey-to-servco-and-netco\/","title":{"rendered":"Telecoms delayering: Successfully navigating the journey to ServCo and NetCo"},"content":{"rendered":"\n

Telecoms delayering: Successfully navigating the journey to ServCo and NetCo<\/h1><\/div><\/div><\/div><\/div>
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Marco Pizzo<\/h5>
May 6, 2024<\/h5><\/div><\/div>
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The telecoms industry has undergone significant disruption in recent years, evolving from traditional, vertically integrated giants to companies dedicated to specific market segments. This delayering approach allows each organization to focus on its core competencies, enabling them to improve efficiency and service quality, while also attracting capital from large asset management companies.<\/p>\n\n\n\n

Callout: A look at Telecoms segment players<\/h2>\n\n\n\n

ServCo<\/strong> the service provider: Concentrates on customer experience, marketing, and service delivery. <\/p>\n\n\n\n

NetCo, <\/strong>the network provider: Specializes in managing and optimizing the network infrastructure.
FiberCo:<\/strong> Focuses on expanding and maintaining the fiber-optic network.
TowerCo: <\/strong>Specializes in tower infrastructure management.<\/p>\n\n\n\n

While the separation of Tower companies is a process that started years ago, the delayering of the Network organization and the Service organization is still in its infancy. This process is incredibly complex and requires a strong vision, effective planning, well-defined platforms evolution\/consolidation, and robust governance.<\/p>\n\n\n\n

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Figure 1: Telecoms evolution<\/figcaption><\/figure>\n\n\n\n

Defining the delayering journey<\/strong><\/h4>\n\n\n\n

When separating the NetCo and ServCo, financials and contract terms usually lead and define the short-term plan. However, decisions should be based also on long-term considerations for people, technology and processes.<\/p>\n\n\n\n

Ultimately, the goal is to enable the ServCo to compete in a fast-moving digital world, where connectivity is often perceived as a commodity. Meanwhile, for NetCos, they must reassess how they deliver and oversee network services in order to make the catalog accessible to diverse ServCo clients over the long term.<\/p>\n\n\n\n

Delayering can be a complex and often lengthy process. For example, Denmark announced the split of TDC (NetCo) and Nuuday (ServCo) in 2018. However, as of today the separation remains incomplete, and the evolution and stabilization of the tech platforms are still in progress.  <\/p>\n\n\n\n

Advancing the NetCo: Operating the network as a platform<\/strong><\/h4>\n\n\n\n

One of the biggest opportunities of delayering is the simplification and decommissioning of old or redundant platforms. These systems tend to be costly to manage and can often hinder innovation.<\/p>\n\n\n\n

For example, as NetCos move to a business model with only a few clients, they can massively simplify existing ERP, CRM and billing platforms. At the same time, they will have to work hard on two long-term goals:<\/p>\n\n\n\n

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  1. Network as a Service:<\/strong> Offering services from the network to various ServCo organizations. Cloudification of the network is a relevant step in this journey.<\/li>\n\n\n\n
  2. Autonomous networks:<\/strong> Leverage automation and AI to modernize the network. This is a critical step towards reducing complexity and costs, as well as improving time to market.<\/li>\n<\/ol>\n\n\n\n

    To advance the evolution of the NetCo, it’s essential to consider the network as a platform\u2014a dynamic ecosystem of capabilities that the NetCo can offer to various clients. This represents the next phase in the evolution of the Network as a Platform.<\/p>\n\n\n\n

    Creating the ServCo: The journey to digital marketing company<\/strong><\/h4>\n\n\n\n

    Now let\u2019s look at ServCo evolution. Because these organizations are operating as digital marketing companies, ServCos need a well-functioning digital customer engagement platform. Their approach will depend on whether they intend to focus on the consumer or B2B segment. Options include:<\/p>\n\n\n\n