Traditionally, U.S. wireless service providers have been opposed to any type of network sharing arrangement other than sharing space on towers. And even this type of infrastructure sharing is a relatively new phenomenon that developed over the past decade as the big Tier 1 operators sold their tower portfolios to tower companies like American Tower and Crown Castle.
But the cost of not just deploying 5G but attaining widespread 5G coverage in cities, suburbs and inside buildings, is causing some operators to take another look at the advantages of sharing network assets.
Operators in other regions of the world have been much more receptive to network sharing. In Canada, operators Bell and Telus have a reciprocal network sharing agreement in which they share spectrum, antennas, radios, towers and last-mile backhaul connectivity but operate different core networks.
This arrangement between the two Canadian operators was first started back in 2009 with HSPA and LTE and now the carriers are moving forward with a 5G network sharing arrangement.
Likewise, Chinese operators China Telecom and China Unicom have a network sharing arrangement in which they collaborate on 5G base stations and other network infrastructure. And China Mobile and China Broadcasting Network Corp. recently inked a network sharing deal in which the two will build and share a 5G network and collaborate on products and services too.
But the majority of network sharing arrangements occur in Europe, where operators have a smaller number of customers and must share the costs of upgrading their networks with other operators to make their businesses financially viable.
According to Michela Venturelli, analyst with Analysys Mason, traditional telcos in the U.S., such as Verizon, AT&T and T-Mobile, are early leaders in 5G, and therefore unlikely to share their active networks (which is defined as the radio access network, the core network and the network management systems). However, she does see this as an alternative for regional U.S. operators and even mobile virtual network operators (MVNOs) such as Comcast’s Xfinity Mobile and Charter’s Spectrum Mobile, which both operate on Verizon’s wireless network.
For regional players, network sharing makes a lot of sense because it can reduce costs and also allow them to more quickly rollout 5G.
UScellular is already making some moves in this direction. During the company’s first quarter earnings call with investors, CEO LT Therival said that UScellular, which still owns all of its towers, signed a master lease agreement with Dish Wireless.
Therival declined to provide specifics about the deal, such as how many sites Dish will use, but said that the company is looking at other possible partnerships. And those partnerships could be for more than just sharing tower space but also for other “passive” assets such as backhaul, cell site shelters and power too. “We’ve got assets at those towers in the form of generators and shelters and backhaul, and we’re willing to share that with our partners if the economics make sense,” Therival said.
For the cable MVNOs, Venturelli said that she believes they might pool their spectrum assets and other infrastructure, particularly if they start to build out 5G network infrastructure. Cable companies Comcast, Charter and Cox Communications each won a significant number of licenses in the FCC’s Citizens Broadband Radio Service (CBRS) spectrum auction that concluded last year.
Charter spent $464 million for 210 licenses, Comcast paid $459 million for 830 licenses and Cox forked over $213 million for 470 licenses. And cable companies, unlike wireless carriers, have historically worked together because they don’t compete against each other in their markets, making network sharing a much more appealing proposition for them.
Comcast has already indicated that one possible use of its CBRS spectrum will be to supplement (or offload) its existing 4G and 5G traffic on Verizon’s network and use its own network to reduce its costs, particularly in dense geographic areas. If Comcast, Charter and Cox (which currently doesn’t have an MVNO relationship) pooled their licenses, that would make their offloading capabilities even greater.
But those are just two scenarios where network sharing might make its mark in the U.S. Venturelli believes there is a third possibility too – and that involves the cloud companies. As operators migrate to a cloud native architecture, she thinks network sharing arrangements will emerge with cloud providers too.
There is already some movement in this direction. Just look at Dish Network’s deal with Amazon Web Services (AWS) in which Dish will host its radio access network and mobile core in Amazon’s public cloud network. One of the big advantages of this is that Dish believes it can save time and money by leveraging the public cloud to meet its coverage goals and fulfill its FCC spectrum commitments. Dish has to cover 20% of the U.S. population with its 5G network by June 2022 and 70% of the U.S. population by June 2023.
Network sharing may not be widespread in the U.S. market but there are some signs that this may be changing, at least for some segments of the industry. Critics have said that network sharing will make it hard for operators to differentiate their services, particularly if their network coverage is the same. But Venturelli says that there are ways for operators to maintain their differentiation and that involves focusing on the types of services they offer and on customer service and customer experience.
Perhaps it’s time for U.S. operators to start differentiating their services in new ways, beyond just the “best network” claims and set the stage for a new era in wireless – one that doesn’t just rely on just how many towers and small cells you have in your network.