Planning and Implementation of Network Sharing

The Trend Towards Network Sharing

In the early days of mobile, operators built entirely separate networks.  Since then there has been a gradual evolution from this approach, starting with site sharing (often mandated by the regulator), and now going as far as merging networks i.e. sharing the radio access network (RAN).

Infrastructure and network sharing deals have been agreed between major operators in Europe, North America and Asia and elsewhere showing compelling opex and future capex savings.  Industry players and regulators appear to agree that at this stage of the mobile industry life cycle, it does not make sense to build entirely separate networks.

Models of Network Sharing

There are six main models of network sharing:

• site sharing and / or tower sharing is the most common form of network sharing;
• backhaul / backbone sharing is suitable where mobile operators have to build their own transmission rather than leasing capacity from a fixed network operator;
• full RAN sharing, including backhaul transmission is more complex and hence rarer;
• backbone (core) transmission sharing;
• core network sharing, which is quite rare;
• national roaming, which does not involve asset transfer.

Each sharing model has its own strategic and economic drivers, technical requirements and regulatory considerations. An operator specific assessment must be made to evaluate network sharing potential and attractiveness considering:

• the overall strategy as well as the value and competitive position of the current and planned network;
• the availability of suitable partners and partnership models based on existing assets and competitive positions;
• market structure and forecast usage patterns; and
• regulatory imperatives and constraints.

The Benefits

The greatest benefits of network sharing are a substantial reduction in cash expenses and the possibility to greatly improve coverage and capacity:

• Roll-out capex can be reduced, thus yielding immediate cash flow benefits; and
• Lower network opex can be achieved, providing a long term saving and hence higher EBITDA margins.
• Network sharing can speed up coverage roll-out, notably for mobile broadband services, using higher frequency bands.
• National roaming provides an attractive option for new market entrants and operators who do not have lower band spectrum. In some markets regulators have mandated national roaming to aid new entrants.
• Shared networks also mean shared investment risk particularly in the case of mobile broadband.

In markets where coverage obligations are a feature of licensing, network sharing can be an attractive alternative to fulfil such coverage obligations. Collaboration between MNOs makes it more commercially feasible to cover regions with low population density. This may be particularly true in emerging markets and may actually help to deliver policy objectives with regards to making internet access available in rural areas.

Coleago’s consulting team have supported a number of the major network sharing initiatives that have taken place in both developed and developing markets.  Our Network Sharing Overview is also available as a download from this page.

Please call or email us to receive our network sharing project process map.

Main contacts:

Graham Friend
Managing Director
Tel: +41 79 855 1354
graham.friend@coleago.com

Scott McKenzie
Director
Tel: +44 7825 294 576
scott.mckenzie@coleago.com

Downloads

Network Sharing Overview Coleago.pdf