Asia-Pacific operators fall behind Europe in network sharing

Many cellular operators in Europe share network infrastructure to expand into new market segments, while most APAC operators compete on network coverage and may lag behind in monetising their networks.

The Asia-Pacific (APAC) accounts for only 25% (or 9) of the 36 active network sharing arrangements signed in APAC, Europe and North America to date, according to Analysys Mason’s forthcoming Network sharing tracker. By comparison, Europe accounts for 61% (or 22).

Sharing network coverage has allowed operators in Europe to quickly and cost-effectively expand into new market segments. European operators are also more focused on competing by differentiating their services rather than their coverage.

Many APAC operators compete on network coverage and thus do not engage in active network sharing.

Analysys Mason’s recent report ‘Active network sharing business models in Asia-Pacific’ highlighted that active network sharing has failed to gain traction in APAC. Markets such as Indonesia, the Philippines, Singapore and Thailand do not have any active network sharing agreements to date.

Active network sharing refers to sharing of active electronic infrastructure and radio spectrum. Shared equipment includes: antennas, feeder cables, radio access networks (RANs), base transceiver stations (BTSs)/Node Bs, BSC/RNC, backhaul (transmission) and microwave radio equipment.

Reluctance to share network coverage is one of the key reasons behind this trend. Unlike their counterparts in Europe, operators in APAC still put a lot of emphasis on differentiating themselves through network coverage and are therefore hesitant to share it.

This also explains why none of the APAC operators have implemented active network sharing through the consolidation model - that is, pooling established network infrastructure.

By contrast, operators in Europe have successfully implemented the consolidation model in as many as nine arrangements, to the extent of completely merging their networks.

Benefiting from sharing

Analysis of active network sharing partnerships worldwide shows that operators employ active infrastructure sharing for use cases such as rural coverage expansion, cost-effective deployment of 3G or LTE, accelerated nationwide coverage expansion, optimum utilisation of established network resources, increased revenue (through wholesale arrangements), greater spectrum bandwidth (through spectrum pooling) and reduced spectrum cost (as a result of joint bidding).

Some of these use cases - such as rural coverage - are key challenges for operators. Effective and creative application of active network sharing has not only allowed operators to overcome these challenges but also to benefit from them.

Analysys Mason’s forthcoming active infrastructure sharing report analyses the active mobile infrastructure sharing practices of leading operators in Hong Kong, Poland, Russia, Spain and the UK, based on research tracking 35 operators in 27 countries from Asia-Pacific, Europe and North America.

The first report on this topic, ‘Active network sharing business models in Asia-Pacific’, focuses specifically on active infrastructure sharing in 14 APAC countries of IP communications services and their relationship with traditional voice and messaging services.