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Strategic Lever by Intelligent Sharing
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Strategic Lever by Intelligent Sharing

Guidelines for efficient infrastructure sharing



Access network sharing enables telco operators to reduce their service costs and improve their competitive advantage. It will likely become one of the main cost reduction methods for telco, but opportunities depend on only few partnering possibilities and their potential fit. With due consideration of the options, models, risks and the interests of the stakeholders, telco operators can plan, address the challenges and operate more efficiently in a best-fit sharing model.

Diminishing margins and high network development costs have pushed telco operators to look more and more into different possible network sharing options for capital and operational expense reduction. In addition to cost reduction, operators adopt network sharing models to deploy faster, to cover further or to meet regulatory requirements.Different technical options exist, among them access network sharing is the most common, as it can help address the above concerns if technical and regulatory constraints can be managed.

The implementation challenges and risks might render a network sharing arrangement unmanageable and bring it to a halt even before it starts. Agreeing on the general principle may be the easy part, but detailed issues are to be concluded: management of shared infrastructure, planning, operations and main­tenance, governance, commercial terms and so on. This is where most arrangements fall apart despite the apparent cost benefits for stakeholders.

It is therefore absolutely necessary for any operator ­considering access infrastructure sharing to rationally tackle three main ­questions: the Why, the Who and the How, in order to reduce the risks of inefficient sharing arrangement.

Access networks and their related infrastructure are essential elements of service production of any wireless or wireline operator with high asset specificity and high complexity, and are therefore typically subject to vertical integration (Douma, S. and Schreuder, H., “Economic contributions to strategic management”, Economic Approaches to Organization, 3rd ed., Prentice Hall, 2002, pp.205-207.) Although many attempts, even with regulatory intervention, have been made to fully open the telco business to operators without their own access networks – e.g. MVNOs, national roaming, fixed unbundled access –, only few successful long-term examples have been seen. In the end, main players mostly still rely on their own access infrastructures or invest in such once they become relevant market players.

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