While sharing ever more of their infrastructure might sound ridiculous today, all forms of sharing sounded ridiculous ten years ago.
Greater sharing of network assets will be driven by a combination of data demands driving up capacity needs, competition eroding prices and the propagation characteristics of Long-Term Evolution (LTE) requiring more sites. LTE will be a mature technology too by then and its efficiency gains will have already been largely realised.
The result will be a dwindling number of physical mobile networks, until some markets at the forefront of this trend are left with just one mobile network, including the RAN, backhaul and even transport elements of the core. However, some elements may remain independent, particularly at integrated operators in which proprietary legacy systems cannot be incorporated, or the operator doesn't want to.
2020 won't see the conclusion of this trend, but its advent will certainly be apparent, most noticeably in Europe and particularly the UK.
The notion is not entirely far-fetched nor without precedent. Functional separation is becoming increasingly common in fixed telecoms, again with the UK leading the way. For mobile market forces are leading to a single network, rather than a dominant player being forced to open up its network.
Vendors could end up operating the single network
An interesting facet of recent announcements has been Ericsson's role. It could end up managing the networks for four of the UK's five operators, if it adds O2 - highly likely given its experience with the combined T-Mobile and 3 venture, MBNL. In the long-term future, why not let it operate the single, shared network‾ Today's mobile network operators could become service retailers.
We're not suggesting that Ericsson has hidden plans to morph into a mobile wholesaler, but following the chain of events to its logical conclusion, this is a reasonable conclusion. And of course Ericsson's rivals will be joining the managed services fray.
There's also the option of nationalising the network. The banking industry is currently undergoing this process, so why not‾
Mobile regulation would have to evolve
Regulation of mobile services has focused on infrastructure-based competition since the industry's inception. Only over the last couple of years has there been a shift in ideology towards more services-based rivalry, starting with the fixed network, but increasingly now in mobile.
While many regulators impose limits on network sharing, the pressure to change will become unstoppable, with the change occurring at different rates in different markets. How will regulators deal with the process of transferring ownership of spectrum and infrastructure to an infrastructure vendor‾ Mobile regulation must evolve.
If there is a single infrastructure, those with significant market power in the future will be today's vendors. Today's MNOs will effectively be MVNOs.
In markets where vendors control networks, surely their own equipment will be favoured‾ From an infrastructure industry perspective this means a smaller global equipment market and managed services deals becoming crucial to survival. The only other survival strategy will be to innovate - and thereby become indispensable to the mega-vendors/network operators.
Survival of the fittest
Following current trends to their ultimate conclusions highlights how change will affect operators, infrastructure vendors and regulators.
Who will be the winners and losers from all this‾ Commercial Darwinism will mean that those who can adapt will prosper. Those that cannot, or will not, will perish.