While the concept of network sharing has gained support over the past decade, European mobile operators have approached the opportunity with great caution. The central promise of significant capex and opex savings has proved elusive for many that have attempted to construct sharing partnerships, with the merging of 2G legacy networks now considered too complex and costly to attempt.
Even at the 3G level, network sharing has been a difficult road to navigate as the technicalities become mired with the marketing requirements for each operator to differentiate themselves.
Key to a successful partnership, claims Chris Buist of PA Consulting, is the need to establish a set of common goals. "Each operator will have well-established objectives and service levels, and integrating these can present many problems; whereas, when building a new network, it's much easier to align these requirements prior to making any capex investment. Our view is that there'll be significantly more sharing with the deployment of LTE, with the major objective being cost savings."
While there is growing acceptance that LTE deployment could provide the catalyst for significantly more European network sharing, the questions regarding its success remain the same. Although equipment vendors can now supply base stations that support numerous air interfaces and be easily shared between operators, the increasingly thorny problem raises the question: How far back into the network infrastructure should sharing go?
"The more you can share, the greater the cost saving. But this involves a much more detailed agreement, such as detailing service levels including an understanding that, if these service levels differ, who will pay for the extra investment," said Buist. "But with different service levels, deciding who pays what can be quite contentious."
Discussions around services levels and extending sharing into the core network not only raise marketing issues, but huge concerns regarding the potential for subscriber data to become compromised.
A possible solution for this lack of trust is the inclusion of an independent third party, such as Ericsson, Nokia Siemens Networks, Alcatel-Lucent or Huawei, as a managed service provider. Industry observers are becoming increasingly convinced that these vendors will be running the majority of networks around the world within the next few years.
However, these managed service providers, or outsourcers, are still largely struggling to make an acceptable level of profit for themselves--and are fighting hard to gain market share, achieve the required scale and transform the networks they already manage...Continued