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Frugal telcos drive 280 percent growth in network sharing

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Network sharing agreements have surged in the past five years as a spike in data traffic caused operators to pursue cost-savings as a priority, new findings have revealed. 

According to a new mobile network infrastructure sharing database from Coleago, the increase in mobile traffic has led to a 280 percent increase in network sharing deals, as operators look to accommodate the growth without having to invest in new infrastructure.

The resulting agreements have enabled operators to save between 25-40 percent of network costs, the telecoms consultancy firm revealed. Meanwhile, telcos’ more economical approaches have resulted in a number of emerging trends.

For example, Coleago revealed radio access network (RAN) sharing is now extending to multi-operator radio access networks, in which several mobile operators share radio RAN infrastructure. Spectrum sharing through multiple operator core networks is also on the up, the firm said, as is the consolidation of mobile network operators in the market. 

[Read more: eircom confirms Three network share as full-year financials show decline]

“TowerCo” deals, in which an operator sells its radio towers to a third party and then leases them back, is yet another trend beginning to emerge amongst cost-conscious telcos, according to Coleago.

Company Director Chris Buist said: “EBITDA and ROCE [return of capital expenditure] pressure is the predominant driver of this huge increase in network sharing deals, be that as a result of revenue competition from new entrants, MVNOs or OTT players, regulators reducing termination rates or international roaming fees, or the rapid increase in mobile data traffic. 

“The latter, forecast to double every two years, is possibly the most significant.”

Looking ahead, Coleago estimated that NFV and SDN deployments could help encourage further network sharing, but warned operators would have to move fast to ensure they were not left behind.

Buist said: “When it comes to gaining cost savings from network sharing, MNOs have no time to lose, with clear evidence of a first-mover advantage, or at least a last-mover disadvantage. Operators are therefore advised to prepare their strategies and start work soon.”

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