With increasing costs and decreasing revenues, its no surprise that operators are looking at ways of keeping costs down. Some operators are postponing their 5G plans in favour of Gigabit LTE. Other die hard operators are pushing ahead with 5G but looking at ways to keep the costs down. In Japan for example, NTT DOCOMO has suggested sharing 5G base stations with its two rivals to trim costs, particularly focusing efforts in urban areas.
In this post, I am looking to summarise an old but brilliant post by Dr. Kim Larsen here. While it is a very well written and in-depth post, I have a feeling that many readers may not have the patience to go through all of it. All pictures in this post are from the original post by Dr. Kim Larsen.
Before embarking on any Network sharing mission, its worthwhile asking the 5W’s (Who, Why, What, Where, When) and 2H’s (How, How much).
- Why do you want to share?
- Who to share with? (your equal, your better or your worse).
- What to share? (sites, passives, active, frequencies, new sites, old sites, towers, rooftops, organization, ,…).
- Where to share? (rural, sub-urban, urban, regional, all, etc..).
- When is a good time to start sharing? During rollout phase, steady phase or modernisation phase. See picture below. For 5G, it would make much more sense that network sharing is done from the beginning, i.e., Rollout Phase
- How to do sharing?. This may sound like a simple question but it should take account of regulatory complexity in a country. The picture below explains this well:
- How much will it cost and how much savings can be attained in the long term? This is in-fact a very important question because the end result after a lot of hard work and laying off many people may result in an insignificant amount of cost savings. Dr. Kim provides detailed insight on this topic that I find it difficult to summarise. Best option is to read it on his blog.
An alternative approach to network sharing is national roaming. Many European operators are dead against national roaming as this means the network loses its differentiation compared to rival operators. Having said that, its always worthwhile working out the savings and seeing if this can actually help.
National Roaming can be attractive for relative low traffic scenarios or in case were product of traffic units and national roaming unit cost remains manageable and lower than the Shared Network Cost.
The termination cost or restructuring cost, including write-off of existing telecom assets (i.e., radio nodes, passive site solutions, transmission, aggregation nodes, etc….) is likely to be a substantially financial burden to National Roaming Business Case in an area with existing telecom infrastructure. Certainly above and beyond that of a Network Sharing scenario where assets are being re-used and restructuring cost might be partially shared between the sharing partners.
Obviously, if National Roaming is established in an area that has no network coverage, restructuring and termination cost is not an issue and Network TCO will clearly be avoided, Albeit the above economical logic and P&L trade-offs on cost still applies.
If this has been useful to understand some of the basics of network sharing, I encourage you to read the original blog post as that contains many more details.