Share and share alike: the rise of network sharing
Published: 26 March, 2008
I roughly estimate that, globally, the average number of mobile operators per national market is about three, although some countries have as many as six. The European average is higher and is closer to four operators per EU nation. Nonetheless, that gives an average of six cellular networks per country when all operators have deployed both 2G and 3G services.
Deploying and maintaining a network is a major undertaking. It requires the acquisition of a suitable site; labour costs to erect towers and install equipment; the provisioning of backhaul; and of course the cost of the radio equipment itself. Multiply that across the tens of thousands of sites required to build-out national coverage and it's not surprising that the network represents an operator's single largest Capex item and a large portion of its Opex. For example, pure network expenses represent almost 67% of Vodafone's Capex and almost 30% of its Opex.
Rentals/leases | 41% |
| Backhaul | 21% |
| Maintenance | 22% |
| Other (inc. power) | 16% |
| Source: Vodafone | |
Given these huge costs, network sharing - where two (or potentially more) competing operators agree to share all or part of their radio infrastructure - can deliver large Capex and Opex savings. Generally speaking, network sharing sits on three levels:
- Site sharing - where operators share the same site but install their own separate base stations
- RAN sharing - in this context the RAN includes the site, mast, antenna, site support cabinet and power supply as well as transmission links. Under this type of sharing operators share the same RAN (on separate frequencies) and traffic is routed to the operators' respective core networks
- Roaming sharing - operators maintain separate networks but combine their coverage footprint by allowing roaming on each other networks
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