Network infrastructure sharing can be classified into three different categories – passive, active and core. Passive refers to the sharing of non-electronic infrastructure such as shelters, towers/masts, power supply and air conditioning. Active refers to the sharing of electronic infrastructure such as antennas, feeder cables, radio spectrum, radio access networks (RANs), base transceiver stations, and Node B. Core refers to the sharing parts of the core network besides RAN. Of these, passive sharing is the most common form of sharing among operators in India.

Globally, active network sharing has achieved the highest adoption in Europe, which has the maximum number of such partnerships. In comparison, in the Asia-Pacific (APAC) region, passive sharing has experienced significant uptake while active network sharing has failed to gain traction so far. As of September 2013, operators in the APAC region, in countries such as China, India, Indonesia and Thailand, had signed 64 network sharing arrangements comprising RAN, fixed access, passive tower/site and backhaul sharing. Active network sharing arrangements constitute only 14 per cent of the total network sharing arrangements in the region so far. Australia, Malaysia and Vietnam are the only countries in the region to have implemented active network sharing.

In India, while telecom operators have collaborated extensively for passive sharing, they are yet to sign any active network sharing deals. However, as telecom operators expand their 3G networks and roll out 4G services, active infrastructure sharing is likely to gain traction.

Experience so far

Strategic, regulatory and operational factors have hindered the adoption of active network sharing in India. Some of these factors are explained below:

• Network coverage as a differentiator: Coverage is typically a differentiating factor for operators that have invested significantly in their networks. Sharing RAN could lead to the dilution of this competitive advantage, especially in an aggressive market like India.

•Service differentiation: Active sharing could, to some extent, restrain operators’ independence as some network parameters are common to both operators. They may have to agree on the key parameters which can become a complicated process.

•Operational challenges: Working out joint agreements is a tedious task and involves complex negotiations on a variety of operational parameters. Further, these involve the sharing of confidential competitor data. In the Indian scenario, operators tend to have multiple vendors across circles and this becomes a major operational issue.

•Regulatory stance: While the government allowed active sharing in 2008, it was only for select components. Spectrum sharing has been allowed recently and detailed guidelines are yet to be notified.

Changing scenario

The policy and regulatory framework to facilitate active sharing in India is gradually becoming clearer. The first set of guidelines for active infrastructure sharing was released by the Department of Telecommunications (DoT) in 2008 when it permitted the sharing of antenna, feeder cable, Node B, RAN and transmission infrastructure. In 2009, the department enhanced the scope of IP-1 providers to cover active infrastructure, if provided on behalf of unified access service licensees or cellular mobile service providers.

In order to put in place spectrum management policies and cover aspects like spectrum pooling, sharing and trading, the National Telecom Policy, 2012 proposed to enact a separate spectrum act. To that end, in December 2013, DoT issued guidelines allowing spectrum sharing among operators in the 1800 MHz, 900 MHz and 800 MHz bands in the same circle, while not permitting leasing of airwaves. However, the spectrum usage charge, which will be levied on both the operators individually for the total spectrum held together, is yet to be finalised. On the industry front, operators are considering active infrastructure sharing due to several factors, like the need for operational efficiencies, limited roll-out of 3G networks and the availability of adequate mobile broadband spectrum. With their margins under pressure due to huge investments in spectrum acquisition, and a heavy debt burden, operators are looking at active infrastructure sharing to optimise costs. This will enable them to rapidly expand their 3G network coverage as well, which is still limited to only a few cities (~20 per cent points-of-presence coverage) and monetise 3G spectrum investments.

New long term evolution (LTE) players are showing a greater willingness to enter into network sharing arrangements to speed up their service roll-out. The auction of additional mobile broadband spectrum in the 1800 MHz, 2100 MHz and 700 MHz bands will result in a number of new network roll-outs by existing and new 3G/4G players, and this may drive active infrastructure sharing.

Given the complexities involved in active infrastructure sharing, the greenfield model is likely to be more popular, wherein operators would jointly build out new network infrastructure in order to expand high speed broadband coverage in rural areas and to deploy new technologies such as 3G and LTE in a cost-effective manner. Operators around the globe have found it beneficial and feasible to adopt the greenfield model in tandem with joint bidding and sharing of 3G/LTE spectrum.

The consolidation model may also gain acceptance; however, it involves a high degree of cooperation. Operators have utilised this model to expand coverage rapidly by leveraging the existing network infrastructure in rural and urban areas. s

Based on a presentation by Kunal Walia, Engagement Manager, Analysys Mason at tele.net’s Eighth Annual Conference on Telecom Infrastructure in India on April 29-30, 2014 at The Leela Ambience, Gurgaon