
Navigating Netco vs. Servco: TM Forum Q&A With Chad Dunavant

To get ahead of the competition and future-proof their offerings, communications service providers (CSPs) must constantly seek innovative ways to drive resilient growth and retain their customers. And telecom operators that make the Netco/Servco split can see a significant improvement in their financial performance. For example, CSPs undergoing a Servco transformation stand to increase their B2C margins to 15-20% according to McKinsey & Co. The Netco/Servco split involves separating the network infrastructure operations (the Netco) from the customer-facing services and applications (the Servco). This allows each entity to focus on its core competencies, fostering greater agility and specialization—ultimately fostering a superior customer experience. AI is set to accelerate this transformation by enabling automation, intelligent network management and personalized service delivery.
What strategies are the leading CSPs using? And how are they leveraging AI in pragmatic ways to grow customer loyalty as well as revenue? CSG Chief Strategy and Product Officer Chad Dunavant sat down with TM Forum for an interview on how CSPs are navigating the new era of personalized digital engagement and optimized data analysis. Here’s what he discussed:
Netcos vs. Servcos: Operators can leverage the distinct advantages of Netco and Servco models and focus on flexibility and cost efficiency in their service offerings.
The role of AI in enhancing customer experience (CX): AI is playing an ever-larger role in customer engagement, both in call centers and online. Find out what AI means for optimizing networks, enhancing performance and increasing efficiency for Netcos and Servcos.
The importance of CX and data utilization: How can companies improve CX through personalized engagement and targeted service offerings? Chad explains how leveraging large data sets to predict and meet customer needs effectively will be a critical differentiator for operators.
What strategies should operators use to evolve into network companies and platform-driven service companies? What role do you see AI playing in the realization of those strategies?
Chad: Let me start with the service side first, or what we call Servco. This is not a new business line for them [operators] but they need to think about the realities as they approach the new consumer demand. On the Servco side specifically, they need to look for flexibility and cost avoidance. They need to look for opportunities that allow them to launch new digital services more quickly at scale, leveraging applications that run in the cloud natively. Applications delivered through SaaS really allow the operator the flexibility to launch these new services more quickly, more cost effectively and targeted at those consumers.
