2024電信公司的未來：繪制成功新路線研究報告

Mcsey

&company

Technology,Media&TelecommunicationsPractice

Thefutureoftelcos:Mappingtheroutestorenewedsuccess

Foralltheireffortstoreignitegrowth,telcoshaveyettoovercometheir

fundamentalchallenges.Doingsoisstillfeasible,buttheviablepathswillrequireunprecedentedtransformation.

byAndreaTravasoni,LucaFiandro,andVenkatAtluriwithMarcoLabianca

?GettyImages

December2024

Inrecentyears,telcoshaverepeatedlyattemptedtoturnaroundtheirflaggingfortunesbyembracingagilewaysofworking,core-adjacentbusinesses

orservices,advancednetworktechnologies,andassortedproductivityimprovements.Yetthese

piecemealeffortshavenotbeensufficienttoturnthetide.Thechallengestheindustryfacesare

fundamentalandarguablyexistential,includingmassivecapitalrequirementsandcomplex

underlyingissues.Andresponsestoourrecent

surveyof60telcoCEOsandothertopexecutives

fromaroundtheglobeshowthatexecutivesarewellawareofthesedauntingobstacles.

Nevertheless,basedonourresearchandexperienceinthemarket,includinginterviewswithtelcoleaders,weseeafewviableoptionsforputtingtheindustry

onfirmerfooting.Telcoscanreinventtheintegratedbusinessandoperatingmodel,moveawayfromtheintegratedapproachbydelayeringorseparating

intomultiplefocusedentities,ortransformintoautility-likeorganizationwithgreateremphasisonsustainability,efficiencyandmoregovernment

support.

Fundamentalchallenges

Themassivecapitalrequiredtodevelopandmaintainincreasinglysophisticatedtelecomnetworkshas

certainlytakenitstoll:theindustryhasseenits

returnoninvestedcapital(ROIC)andshareholderreturnssteadilydecline,evenastechcompanies

haveharnessedtelecominfrastructuretogenerate

unprecedentedvaluecreationthroughthebroadbandandsmartphonerevolutions.

However,thatinvestmentburdenisonlyonepieceofabroader,morecomplexsetofissuesthattelcosmustaddresshead-oninbold,creativewaysiftheyhopetolaythefoundationforamoresustainable,long-termfuture.Thoseissuescanbegrouped

intothreemaincategories,eachofferingpotential,thoughoftendifficult,solutions:

1.Theindustry’slegacybusinessmodelsmaynot

producesufficientprofitabilityandreturnsto

sustaintherequiredlevelsofcapitalinvestments.

Overcomingthismayrequiretelcostoembrace

newmodelsandextensive,unprecedented

collaborationwithinandbeyondtheindustryto

enablealternativerevenuesources.Forexample,streamingorotherover-the-top(OTT)providerscouldpayforuseofexcessconnectivity,ortelcoscouldoffernewB2BAPI-enabledproducts.

2.Theevolvingindustrystructureandinnovationsraisetheprospectofeventoughercompetition.Newtechnologiessuchase-SIMwilllikely

reducebarrierstoentry;someairlinesare

alreadymarketinge-SIMpackagestotravelers

whopreviouslywouldhavehadtoleverage

roamingortemporarylocaloffers.Similarly,

theemergenceofwholesale-only,specialized

playersinfiberallowsnewplayerslikeutilities

andretailerstodeveloptheirowntelcoofferings.Techchampionsarelikelytolaunchtheir

ownconnectivityserviceswhileaggressive

mobilevirtualnetworkoperators(MVNOs)andsecondaryordigitalattackerbrandsarealsorollingoutinmajormarkets.Sometelcosare

likelytorespondbyengaginginat-scaleM&A,andmajormarketconsolidationmay—finally—occur.

3.Macroeconomicuncertaintymaydriveagrowingwaveofregulatoryinterventions.

Amidchallengingeconomicconditionsfor

consumers,customer-focusedregulatorsin

certaingeographiesmaylowerorputdownwardpressureontelcos’averagerevenueperuser.

ThishasalreadybeenthecaseinpartsoftheEU,

wherepolicymakershaveimplementedrules

onpriceincreases.Theevolutionofexisting

policies,suchasdataprotectionframeworks

inemergingmarkets,willcontinuetoshapetheindustry,inmanycasesdictatinghowtelcos

leveragecustomerdata(forinstance,with

proactiveoutreachandmarketing).Addressingthiswillrequirestrongerandmoreconcerted

industry-wideeffortstoincreasethevisibilityofthechallengesandpotentialrisksofpersistentinadequatereturnsoninvestedcapital.

Togainabetterunderstandingofhowthetelco

industryviewsitschallengesandpotentialsolutions,wesurveyed60telcoCEOsandothertopexecutives

2Thefutureoftelcos:Mappingtheroutestorenewedsuccess

fromaroundtheglobe.1Theirresponsesrevealwhatleadersconsidertheirmostpressing

concerns:profitability,competitionfromnewbusinessmodels,andregulatoryconstraints(Exhibit1).Theseconcernsinformthethree

potentialpathstorenewalthatthisarticlewillexamine.

Giventhefinancialstrugglesofthepastdecade

andahalf,it’seasytoseewhyprofitabilitytops

thelistofexecutives’concerns.Investorsentiment

hasbeensonegativethatevenamongthetelcosthatmanagedtogrowtheireconomicprofit

from2017through2022,halfsawnoincreaseintheirmarketvalue.Worldwide,theonlycarriers

thatenjoyedasignificantmarketbumpwerea

relativelysmall,selectgroupofcarriersthatgrew

boththeirtopandbottomlinesmorethanthe

industryaverage.InNorthAmericaandWesternEurope,theyamountedtojustover10percentofalloperators.

Thesector’songoingcapitalexpenditure(capex)requirementsareoneofthekeydriversofmarket

wariness.Whileannualrevenuegrowthhas

stagnatedtoaround2percentworldwide—up

barely1percentinNorthAmerica,anddownby

thesamefigureinEurope—telcos’investedcapitalgrowthhasoutpacedit.Andasindustryinvestedcapitalhassoaredbyaround$300billionsince

2018,telcos’ROIChasslowlybutsteadilydeclinedinNorthAmericaandEurope,fallingroughly10to15percentfrom2018to2022.

1McKinseyGlobalTelcoExecutiveSurvey,February2024.

Exhibit1

Telcoleadersidentifyprofitability,newbusinessmodels,andregulationasthemostpressingissuesforthefuture.

NumberoftelcoC-suiteexecutivescitingissueasoneoftheirtop3concerns1

Pro?tability

Competitionfromnewbusinessmodels

Regulatoryconstraints

Capitale代ciencyandefectiveness

Consumerpressure

Operationalchallenges(eg?ber/5Grollout)

Liquiditytosustainoperations

Competitionfromtraditionalplays

Inlationarypressure

Needtobuildcashcushionduetoeconomicuncertainty

26

21

191816

151412

7

28

1Q:Howwouldyourankyourcurrentmostpressingurgencies?

Source:McKinseyGlobalTelcoExecutiveSurvey,Feb2024(n=60)

McKinsey&Company

Thefutureoftelcos:Mappingtheroutestorenewedsuccess3

Industryleadersdon’texpecttheinvestment

burdentobeliftedanytimesoon.Aroundtwo-thirdsofsurveyrespondentspredicttheircapitaloutlayswillaccelerateoverthenextthreetofiveyears,butlessthanathirdsaytheyanticipateasimilarboost

inrevenuesduringthesameperiod.Evenso,morethan90percentoftelcoCEOsandotherleaders

agree,atleasttosomeextent,thattheindustrywillcontinuetobeamajorsourceofinnovationand

economicgrowthinthecomingyears,withmany

sayingthesector’senablingrolewillbecomeeven

greaterthanithasbeen.AsoneCEOofaglobal

integratedtelcotoldus,“Telecomisthecenterpieceofoureranow.Allinnovationsneedstrongtelecominfrastructure.”

Ofcourse,thatoptimismabouttelcos’future

importancedoesn’tnecessarilytranslatetoa

bullishviewoftheirownsuccess.Onlyabouthalfofthosesurveyedpredicttheindustry’scurrent

dynamicswillimproveinthenextdecade.One

executivewasskepticalofthesector’sability

toembracefundamentalchange:“Thereisnot

enoughimpulseintheindustrytochangethe

businessmodel.Companiesareconcentratingonrestructuringratherthaninnovation.”Whetheror

notthatisanaccurateassessmentoftheindustry’scapacityforchange,thereisnodenyingthatthe

industrystillhasanopportunitytoradicallyremakeitsbusiness.

Threemainoptionsforastrongerfuture

Basedonourresearchandexperienceinthe

market,includinginterviewswithtelcoleaders,wehaveidentifiedthreeviablepathsfortheindustrytoreachrenewedsuccess.

Reinventingtheintegratedtelcobusinessandoperatingmodel

Iftheentiremodelanindustryhaslongrelieduponforconsistentgrowthandprofitabilityisnolongeruptothetask,thenitmakessensetotrytocomeupwithsomethingbetter.Astelcossetouttodo

justthat,therearetwomainapproachestheycan

leverage:boostingefficiencyandeffectiveness,andpursuinggrowthatscale.

Boostefficiencyandeffectiveness.Telco

surveyrespondentsciteddigitaltechnologies,

organizationalrethinking,andinvestmentsharingasthemostimportantleversforfuturevalue

creation(Exhibit2).Weagreethatthesector’s

bestopportunitiestoturnthingsaroundwiththeircurrentcorebusinessrevolvearoundthoseareas.

—Redesigningtheoperatingmodel.Telcoscan

begintolayanew,streamlinedfoundationfor

successwithacomprehensive,digital-driven

redesignoftheentireoperatingmodel.Insuchanoverhauloftheorganization,telcoleaders

shouldactasiftheyarestartingentirelyfrom

scratch,devisinganenterpriseunencumberedbycurrentconstraintswhilemakingclearthat

thetransformationisoneoftheirtoppriorities.Tosucceed,thisshifthastohaveanimpacton

allkeyfunctions,fromcustomercare,marketingandsales,andcustomervaluemanagementtofinance,accounting,andstrategy.

Digital,AI/generativeAI(genAI),data,andautomationneedtobeatthecenterof

virtuallyallbusinessactivities,enablingaflexibleandresilientorganizationthatcan

benefitallstakeholders,includingcustomers,employees,andinvestors.Thesetools

candrivethetransformationoftelcosinto

trulycustomer-centricenterprises,where

personalizationandaproduct-andchannel-agnosticperspectivearetheorderoftheday.

Forexample,telcoscanleveragegranularuserdatatomakeindividualizedplananddevice

recommendations,promos,andotheroutreach.Orcarriers’serviceteamscanuseAItechnologytotroubleshootandresolvepotentialtechnicalproblemsbeforecustomershaveevennoticedthem.Iftelcoscaneventuallypulloffsuchan

ambitiousshift,tothepointthatvirtuallyall

customerinteractionsarepersonalized,the

rewardscanbesizable.PreviousMcKinsey

researchhasshownthatholistictransformation

4Thefutureoftelcos:Mappingtheroutestorenewedsuccess

Exhibit2

Criticalleversforvaluecreationincludedigitaltechnologies,organizationaltransformation,investmentsharing/capexefficiency,andB2Bgrowth.

ShareoftelcoC-suiteexecutivescitingleverasmostimportantforfuturevaluecreation,1%

Digital,AI,andautomationatscale

Coretechtransformation

Organizationalrethinkingandagileoperatingmodel

Investmentsharing(eg,jointventures,partneringwith?nancialinvestors)

AggressiveB2Bgrowth(includingecosystems,API-enabledservices,SaaS)

Capexe代ciency

Cross-countryconsolidation/inorganicgrowth

In-countryconsolidation/inorganicgrowth

Sustainabilityandgreenbusinessbuilding

Metaverse

GenAI

Delayering

8

6

6

5

5

2

2

2

2

2

1

18

1Q:Howwouldyourankthetop3leversyouaretryingtodeployforvaluecreation?

Source:McKinseyGlobalTelcoExecutiveSurvey,Feb2024(n=60)

McKinsey&Company

canincreaseincrementalrevenuebyupto8

percentayear,reducethecosttoserveby10to15percent,anddriveupcustomersatisfactionscoresby20to40points.2

—Investmentsharing.Onthecapitalside,telcoscanuseacollaborativemodeltoreducethetollthatnetworkandinfrastructureinvestments

havetakenonROIC.Severalapproacheshavealreadyshownpromise,startingwithbasic

networksharingbetweenoperators.Networksharinghastakenoffinthepastseveralyears,

astelcosrealizedjusthowcostlyitwouldbe

tobuild5Ginfrastructure.Inthe2010s,the

numberofnetwork-sharingdealsannouncedgloballyskyrocketed,reachingnearly500by2020.Theappealiseasytosee;dependingonthespecifictypeofnetworksharing(passive,active,andsoon),thesepartnershipscansave10to25percentinoperatingexpensesand

15to40percentincapitalexpenses.Fullya

quartertoathirdofEUwirelesssubscribers

nowhavetheircalls,texts,anddatatransmittedonactivelysharednetworks.

2

DuarteBegonha,JacopoGhidoni,andOlliSalo,withAnnalisaGradogna,“Modelmakeover:Turningatelcointoacustomer-centrictechco,”McKinsey,May28,2024.

Thefutureoftelcos:Mappingtheroutestorenewedsuccess5

Otherapproachesincludeestablishinganewindependententitytoshareandlessenthe

necessarycapexorattractingthird-party

investmentinnewwholesaleopportunities.InMalaysia,forinstance,thegovernmenthas

createdaseparatewholesalenetworkoperatorto

design,build,operate,andmaintainthecountry’ssole5Gnetwork,fromwhichdifferentcarriers

sharecapacity.Malaysiantelecomregulators

estimatethatitwouldcostindividualtelcos30

to60percentmoretodeveloptheirown5G

infrastructurethanitwillthroughthewholesale

networkoperator.Thisentityisnotallowedtosellitsownretailservicesandisrequiredtoprovide

equalandtransparentaccessandpricingtoall

mobileoperatorsinthecountry.Fortheirpart,thecarriersarenotallowedtodevelopormarkettheirownexisting5Gspectrum.3

AnotherexampleisinItaly,whereanenergy

incumbentandastate-ownedinvestmentfund

establishedtheOpenFiberjointventureto

developanindependent,wholesalefiber-to-the-home(FTTH)network.Aclearmission,dedicatedprojectfinancing,independentandwholesale-

onlypositioning,andeffectivereuseofexistinginfrastructure(includingtheshareholder’s)

enabledamuchfasterrolloutandlowercapital

spendingthanotheroperatorscouldpulloff;by2023,afterjustsevenyearsinexistence,thenewplayerhadgainedaccesstoalmost15million

households(inbothurbanandrurallocales)

throughcontractswithmorethan300playersandalmostthreemillionactivecustomers.

Theideaofpartneringwithenergycompaniesorotherenterpriseswiththeirowncomplementary,widespreadphysicalinfrastructuretoquickenthepaceandreducethecostofnetworkbuild-outisgainingmomentumintheindustry.Manytelcos

andothertelecomplayershavejoinedforceswithutilitycompaniestotaptheirexistingpolesand

fiberductsfortheir5Gandfiberdeployments.In2021,USwirelessinfrastructureproviderSBA

Communicationsspentnearly$1billionfortherightstoattachwirelessantennasonPG&E’s

thousandsoftransmissiontowers.Thegoalisto

speedthetransitionfromthetraditionaltower-based,macrositenetworkthatisn’tscalablefor5Gtoonethatusessmallcells.

Yetanotherpotentialavenuefortelcoslooking

toreducethecostofinfrastructureistowork

withtheirpeersinthesatellitesector.Though

regulation,costs,andmanufacturingcapacityarestillissues,recentadvancesinlow-earth-orbit

(LEO)satellitetechnologyallowforlowerlatency

andhigherspeedsthantheirgeostationary

predecessors.Combinedwiththefactthatsuch

solutionscanbesetupfasterthantraditionalfiber,it’snowonderthatgrowingnumbersoftelcosareconsideringpartneringwithLEOproviderstohelpplugholesandimproveserviceintheircoverage

maps,especiallyinremote,low-densityrural

areaswheredeadzonesaremoreprevalent.Thiscouldbeparticularlyattractiveincertainparts

oftheworld,suchasAfrica,India,LatinAmerica,andCentralAsia,whereinternetaccessismore

theexceptionthantherule;eventoday,fully

43percentoftheworld’shouseholdslackwebaccess.

Pursuegrowthatscale.Insteadoffocusing

primarilyonmaximizingtheearningspotential

oftheirexistingportfolio,telcoscanalsotryto

expandtheirbusinessbytappingnewrevenue

sourcesaltogether.Going“beyondthecore”withB2CorB2Bproductsalsocanhelpsustainthe

coreconnectivitybusiness,ascross-selling

additionalservicestoexistingcustomerscan

deepencustomerengagementandreducechurn.

Telcoshavehistoricallystruggledwiththeircore-adjacentefforts,butthathasn’tdulledtheirallure.Thevarietyofopportunitiesareinthefollowing

areas:

—B2Copportunities.Onthedirect-to-consumerside,areasthathaveprovedfruitfulinclude

fintech,homesecurity,gaming,travel,and

advertising.In2020,forinstance,Spain

telcoMovistar,inajointventurewithsecurityservicescompanyProsegur,launcheda

homesecurityproductthatwasabletogain400,000-pluscustomersinitsfirstyearof

3“DNB:Afinanciallysustainable5Gcatalystthatbenefitsconsumersandbusinesses,”TheEdgeMalaysia,December26,2022.

6Thefutureoftelcos:Mappingtheroutestorenewedsuccess

operation.4In2023,UKmediaandtelecomoperatorSkydebutedahomeinsurance

producttobepairedwithsmart-home

technology,5whilein2024,Italianoperator

WindTrelaunchedaninsuranceproductpairedwithtraditionalconnectivityservices.Telcos

suchasDocomoalreadymakearound20

percentormoreoftheirrevenuesfrombeyondthecoreproducts.

—B2Bopportunities.IntheB2Bspace,the

industryishopingthatnetworkapplication

programminginterfaces(APIs)cansignificantlyimproveits5Gmonetizationefforts.If

developedsuccessfully,APIscouldbecritical

toolsforenterprisestocreatecompellingnewapplicationsthatdependon5Gfeaturessuchasspeedondemand,lowlatencyconnections,speedtiering,andedgecomputediscovery.

Thesecouldrangefrommoreimmediateuse

casessuchascreditcardfraudprevention

andglitch-freevideoconferencingtofuture

advanceslikeremotelyoperatedequipment

andsemi-autonomousvehiclesinproduction

environments.PreviousMcKinseyresearch

estimatedthatthenetworkAPImarketcould

unlockaround$100billionto$300billionin

connectivity-andedge-computing-related

revenuefortelcos,aswellasanaddition$10

billionto$30billionfromAPIsthemselves,overthenextfivetosevenyears.6

Fortelcostogettheirfairshareofthatopportunity,theywillhavetodevelopa

supplyoffullyinteroperableAPIsthatwork

seamlesslyacrossglobalnetworks.Andonlybycollaboratingatanunprecedentedlevel—bothamongthemselvesandwitharangeofthird

parties,includingvendors,systemintegrators,andenterprisedevelopers—cantheyhave

achancetodoso.“Partnerrelationships

arestillsomewhattransactionalandneed

tobedevelopedtobemorestrategicand

deeper,”notedtheCEOofoneglobaloperator.InSeptember,therewasanencouraging

signonthisfront,assomeofthesector’s

biggestcarriers(includingDeutscheTelekom,AT&T,Orange,Singtel,Telstra,andVerizon)

announcedajointventurewithequipmentgiantEricssontocollaborateandsellinteroperable

networkAPIsgloballytoawiderangeof

developerplatforms.7

—Greenenergy.Theongoingsecularshiftto

greenenergypresentsanotheropportunity

forrenewingtelcos’growth.Byinvestinginitsownnet-zerogoalsaswellasnewsustainabilityofferingsandbusinesses,theindustrycan

improvenotjustitstopandbottomlines,but

alsoitsappealtostakeholdersincluding

investors,government,customers,andtalent.Inamarketwithmorethan$50trillionof

assetsundermanagementbyenvironmental,

social,andgovernance(ESG)investors,telcosenteringthisdynamicarenacouldberewardedwithhighervaluationsaswellasoutside

investment.Atthesametime,with30to50

percentofindustrycorporateprofitspotentiallyaffectedbystrongerenvironmentalregulation,telcoshaveamplemotivationtofocusmoreongreensolutions.Customersacrossindustries

arealreadyshowingawillingnesstopaya

premium(15to30percent)forsustainably

producedgoodsandservices,whileyoung

talentisincreasinglydrawntoemployerswitharealdemonstratedcommitmenttoESG.

Anadditionalattractiontotelcosisthe$9trillionto$12trillionofvalueexpectedtobecreated

inthegreenenergytransition.8Telcosarewell

placedtoplayabigroleinthisevolvingeconomy,giventheircoreconnectivityassets,wealthof

proprietaryconsumerdata,vastretaildistributionfootprint,fieldtechnicianworkforce,andexisting

4

LarsEngelNielsen,ThomasJoseph,Jo?oLeonardo,andBenedictVanderspar,“Thinkinglikea‘ServCo’:HowtelcoscandriveB2Cgrowth,”McKinsey,November15,2022.

5AviBen-Hutta,“Skyintroducessmarthomeinsurance,”Coverager,May2,2023.

6CristinaDexeus,FerryGrijpink,FrancescoLibera,andAndreaTravasoni,“WhatitwilltakefortelcostounlockvaluefromnetworkAPIs,”McKinsey,February21,2024.

7“HowEricssonisredefiningdigitalizationthroughagroundbreakingnewpartnership,”Ericsson,September12,2024.8“Playingoffensetocreatevalueinthenet-zerotransition,”McKinsey,April13,2022.

Thefutureoftelcos:Mappingtheroutestorenewedsuccess7

customerrelationshipsandpresenceintheir

homes.Promisingareasripefortelcosinclude5G

sustainabilityapplications,net-zerohomesolutions,

andgreencloudservices.Someearlymovertelcoshavealreadystruckpartnershipswithenergy

companiestomarketintegratedsolardistributed

generation(DG)productsthatcustomerscan

operate,monitor,andmaintainontheirown.Over

thelongterm,thesetypesofserviceshavethe

potentialtospurorganic,incrementalgrowth

whilereducingchurn,savingenergyoperating

expenses,andburnishingtelcos’greencredentialsandbranding.Thebroaderambitionisthatsuch

aproductcanserveasalinchpinforavarietyof

additionalsmart-homeservicescarrierscanoffer,fromhomesecurityandelectricvehiclechargingtohealthmonitoringandentertainment.

Delayering:Separationintomultipleindependentandagileentities

Theeconomicandfinancialchallengesthattelcoshavefacedoflatehaveprovedsoformidablethatmanyindustryparticipantsbelieveonlyadramatictransformationcanturnthingsaround.Inthisview,theonlywaytobecomeamoreefficient,effectiveenterpriseordrivesignificantnewgrowthand

keepupwithtoday’srapidpaceofdisruptionandinnovationistobreakupthetraditionalintegratedtelcomodelcompletely.

Bydelayering(separatingthesinglecompanyintovariousdynamic,independentunits),thethinkinggoes,telcoscanfinallyunleashtheirhidden

strengthsthathavebeenburiedinmassive,overlycomplexandbureaucraticorganizations.9Many

investorsarewellawareoftheunderappreciatedvalueintheindustry.Inrecentyears,theyhave

snappeduptensofthousandsoftowersannuallytocreatehighlyfocusedcompaniesthathave

grownfasterandbeenvaluednotablyhigherthantheirformerparents.

Therearedifferentwaystogoaboutthistypeoftransformation.Themostcommonistodelink

theservicessideofatelco,or“ServCo,”fromtheinfrastructureornetworkside,oftenreferredtoasthe“NetCo”or“InfraCo,”whichcanbecome

acarrier-neutralwholesaleaccessproviderthatsuddenlyhasamuchbiggerpotentialcustomerbaseofotheroperators.10Thegroupingscanbebasedonvariousfactors,suchascustomers,

products,businessmodels,investmenthorizons,capitalallocation,orevenskillsandcapabilities.

OneoperatorbasedintheMiddleEastandNorthAfrica,e&(formerlyEtisalat),tookitsowndistinctapproach11:itgavebirthtofivenewverticals,

includingtwodifferentgeographictraditional

telcos(onefortheUnitedArabEmiratesand

anotherforallitsotherinternationalmarkets),a

consumerdigitalunit(fintechandcontentOTT

services,forinstance),andanenterprisedigital

unit(cloud,AI,cybersecurity),aswellasacapitalinvestmentsgroupforventurecapitalandprivate-

equityfunding.Thecompanyhasalreadyhadmoresuccessattractingrelevanttalentbecauseofeachentity’sspecificcultureandcareertracks.Also,itstailoredoperatingmodelsoptimizemanagement’sfocusanddecisionmaking,andthespecializationandtransparencyattractmoreinvestorinterest.

Howtodoit.Regardlessofwhichspecific

delayeringmodelatelcochooses,somecommonelementsareessentialtoachievingsuccess:

—Createindependentunitswithasingle-mindedfocusonpure-playgrowth,eachputtingits

customersatthecenter.

—Havenewentitiescloselycollaboratewhere

appropriateandlegal(forexample,bysharingdataorbestpractices/governance)tocaptureasmanyecosystembenefitsaspossible.

—Enablefullperformancetransparencywith

threetofourtargeted,differentiatedkey

performanceindicatorsandnohiddencross-subsidies.

9

KimBaroudy,CristinaDexeus,andAndreaTravasoni,“Delayering:AnorganizationaloverhaulforgrowingEurope’stelcos,”McKinsey,February23,2023.

10“Cantelcoscreatemorevaluebybreakingup?”McKinsey,January22,2020.

11“e&GroupCEO:Transformingfromatelcotoatechco,”McKinsey,December9,2022.

8Thefutureoftelcos:Mappingtheroutestorenewedsuccess

—Createdistincttalentandpeopleofferingswithuniqueschemesforattraction,

progression,retention,andincentivization.

—Articulateclearerstoriestoinvestorsinordertoattractdifferentinvestorprofiles,allowforalongerinvestmenthorizon,andasaresult,potentiallyenjoyhighervaluationmultiples

thanatraditionaltelcowouldachieve.

—OpenopportunitiesforM&A,jointventures,

andpartnershipsthatmaynototherwiseexist,giveninterconnectionsbetweenunits.

Theprosandcons.Thepayoffsofdelayeringcanvary.Themodelsforsuchanoverhaulhavetheirownvaluepropositionsandfinancialimplications,withdifferentgrowthandmarginexpectations

and,consequently,differentmarketmultiples.

Turkcell,Turkey’sleadingmobilecarrier,with

$4billioninrevenuesandoperationsspanning

EasternEurope,keyedinontheB2CandB2B

modelswhenitdelayeredin2018.In