In many countries that have mobile operators as the dominant service providers, at least one mobile operator may have a near-ubiquitous national transmission network that has potential usefulness beyond the narrow needs of mobile service provision. This network could include the provision of digital backbone facilities from widely dispersed POPs for ISPs. Even if the existing capacity is limited for broadband, an upgrade to provide broadband may be significantly more economic than a completely new network.
In mobile networks, infrastructure sharing might include some physical resources (such as towers and buildings), whole transmission links, or sharing coverage areas (so that different network operators provide equipment in different areas with the understanding that retail customers of the other network operators would be allowed to roam there). Because of the cost savings, infrastructure sharing may be a pre-requisite for receiving Universal Access and Service Fund (UASF) support into new areas. This is seen in several recent UASF subsidy competitions where bidders were required to provide sufficient bandwidth capacity and access to radio towers on any new backbone link financed by the subsidy. Bidders also had to guarantee non-discriminatory open access (on commercial terms) [1
A Reference document providing a typical Request for Proposal (RFP) and technical specification for this requirement is provided in section 7 of this Module, Competing for UAS Subsidies
In some countries obtaining construction permits for masts, ducts and buildings can be difficult for a variety of reasons, from the purely bureaucratic to environmental policy perspective. Certainly, sharing towers and buildings is often considered desirable for environmental or aesthetic reasons. There might be advantages for regulators requiring that network operators have sharing agreements in place so that these forms of infrastructure can always be open to other network operators, thereby making second and third applications for permits unnecessary. The government and regulator of India, engaged in a comprehensive economic analysis and industry consultation regarding the potential need and benefits of mobile infrastructure sharing. The regulator, TRAI, published its recommendations on infrastructure sharing in April 2007 [2
]. An overview of the underlying analysis and outcomes of the initial subsidy competitions are provided in Practice Note "Sharing Mobile Network Infrastructure in India"
Another option is to allow national roaming, where coverage is shared. This is for example the case in India: India has auctioned mobile licences on a regional basis (called circles) and national roaming is crucial for customers travelling outside of their providers’ licensed area. However, where roaming call charges are relatively high, this might not serve customers well. The scenario of operators continuing to generate revenues from expensive calls may act as a disincentive to network expansion unless regulation is enacted to limit retail call charges and enforce coverage obligations. However, in scenarios where one network operator is more dominant, national roaming may give the less powerful network operator an opportunity to compete in areas it has not covered itself yet. National roaming might be only required for a limited period of time until networks are more evenly built-out.
In several countries, e.g., Austria and Australia, national roaming has been used to support market entry by a 3G network operator that had no 2G network – the 3G network operator has the right to negotiate temporary national roaming agreements covering access to the 2G networks of the network operators that have both 2G and 3G networks. Without such agreements, the 3G network operator would have very limited coverage. With these types of agreements, the 3G network operator can have national coverage but can be motivated to enlarge its own coverage by the potential economies of scale. The Practice Note "Debates about National Roaming in the EU"
discusses this incentive structure.
- Examples of such open access requirements are in the UA subsidy competitions of Nigeria, Mozambique and Mongolia.
- The Telecommunications Regulatory Authority of India (TRAI) recommendations on Infrastructure Sharing, April 2007.
Module 2, section 6.5, "Mobile Network Sharing"