CoE/ARB Workshop On Infrastructure Sharing and LLU Session 1 Introduction and Background...

CoE/ARB WorkshopCoE/ARB WorkshopOnOn

“Infrastructure Sharing and LLU” “Infrastructure Sharing and LLU”

Session 1 Session 1 Introduction and BackgroundIntroduction and BackgroundInfrastructure Sharing TrendsInfrastructure Sharing Trends

By: Isabelle Gross By: Isabelle Gross

Khartoum – Sudan, 27 – 29 March 2011Khartoum – Sudan, 27 – 29 March 2011



Introduction and background Introduction and background Content outline of this sectionContent outline of this section- when and where did it start?- when and where did it start?- how would you characterise these early experiences - how would you characterise these early experiences of infrastructure sharing of infrastructure sharing - the dilemma between infrastructure sharing and - the dilemma between infrastructure sharing and competition competition -forms of infrastructure sharingforms of infrastructure sharing




Introduction and backgroundIntroduction and backgroundWhen and where did it start? (1/5)When and where did it start? (1/5)Towards 2001 – in European: following the hype of 3G Towards 2001 – in European: following the hype of 3G licensing in Europe and the big investments made in licensing in Europe and the big investments made in licence acquisition, many operators were under licence acquisition, many operators were under pressure to share deployment costs and thus share pressure to share deployment costs and thus share infrastructure. infrastructure. UK: 5 licences auctioned; Revenue: between US$6.1 and 9.1 billion per licenceUK: 5 licences auctioned; Revenue: between US$6.1 and 9.1 billion per licenceSpain: 4 licences auctioned: Revenue of US$120 million per licenceSpain: 4 licences auctioned: Revenue of US$120 million per licenceGermany: 6 licences auctioned: Revenue of US$7.7 billion per licencGermany: 6 licences auctioned: Revenue of US$7.7 billion per licenc




Introduction and backgroundIntroduction and backgroundWhen and whereWhen and wheredid it start? (2/5)did it start? (2/5)Chart of prices of 3G licence Chart of prices of 3G licence per inhabitantper inhabitant




Introduction and backgroundIntroduction and backgroundWhen and where did it start? (3/5)When and where did it start? (3/5)- Sweden – March 2001 between Tele2 and Tella: the two operators - Sweden – March 2001 between Tele2 and Tella: the two operators agreed to set up a joint venture company and deploy a nationwide 3G agreed to set up a joint venture company and deploy a nationwide 3G network. As of 2005, they had one of the largest shared 3G network in network. As of 2005, they had one of the largest shared 3G network in the global telecom industrythe global telecom industry- Sweden – May 2001 between HI3G and Europolitan: the joint venture - Sweden – May 2001 between HI3G and Europolitan: the joint venture was tasked to deploy a 3G network covering 70% of population outside was tasked to deploy a 3G network covering 70% of population outside major cities. Orange later joined the joint venture.major cities. Orange later joined the joint venture.- UK – December 2001 between BT and Hutchison 3G: the main - UK – December 2001 between BT and Hutchison 3G: the main outcome was a roaming deal on 2G between BT Cellnet and Hutchison outcome was a roaming deal on 2G between BT Cellnet and Hutchison 3G. 3G.




Introduction and backgroundIntroduction and backgroundWhen and where did it start? (4/5)When and where did it start? (4/5)Supporting material:Supporting material:- mmO2's BT Cellnet signs 2G national roaming agreement with Hutchison 3G- mmO2's BT Cellnet signs 2G national roaming agreement with Hutchison 3Ghttp://www.o2.com/media/press_releases/press_release_61.asp?archive=yeshttp://www.o2.com/media/press_releases/press_release_61.asp?archive=yes- Nokia chosen as main 3G supplier to 3G Infrastructure Services AB, the joint venture in - Nokia chosen as main 3G supplier to 3G Infrastructure Services AB, the joint venture in Sweden, in landmark network-sharing dealSweden, in landmark network-sharing dealhttp://www.3g.co.uk/ZPR1153.htmhttp://www.3g.co.uk/ZPR1153.htm- Orange joins 3G Infrastructure Services AB as a third owner together with Europolitan - Orange joins 3G Infrastructure Services AB as a third owner together with Europolitan Vodafone and Hi3GVodafone and Hi3Ghttp://www.3gnewsroom.com/3g_news/jan_02/news_1735.shtmlhttp://www.3gnewsroom.com/3g_news/jan_02/news_1735.shtml




Introduction and backgroundIntroduction and backgroundWhen and where did it start? (5/5)When and where did it start? (5/5)

- how would you characterise these early experiences - how would you characterise these early experiences of infrastructure sharing?of infrastructure sharing?- what were the drivers?- what were the drivers?- voluntary versus compulsory sharing?- voluntary versus compulsory sharing?- what was shared?- what was shared?- cost sharing versus infrastructure sharing?- cost sharing versus infrastructure sharing?Khartoum – Sudan, 27 – 29 March 2011Khartoum – Sudan, 27 – 29 March 2011



Introduction and backgroundIntroduction and backgroundThe dilemma between infrastructure sharing and The dilemma between infrastructure sharing and competition (1/4)competition (1/4)The hype of 3G licensing in Europe has been followed by several years of delays The hype of 3G licensing in Europe has been followed by several years of delays before the commercial launch of 3G services. From a regulatory view point, the before the commercial launch of 3G services. From a regulatory view point, the 3G case also marks a move from market liberalisation (competition) to market 3G case also marks a move from market liberalisation (competition) to market facilitation (infrastructure sharing). This is well summarise by the EU position in facilitation (infrastructure sharing). This is well summarise by the EU position in 2002 acknowledging that “From a competition law point of view, network 2002 acknowledging that “From a competition law point of view, network sharing reduces competition," said a lawyer close to the issues. "But there is a sharing reduces competition," said a lawyer close to the issues. "But there is a recognition by the Commission that something has to be done for the mobile recognition by the Commission that something has to be done for the mobile industry.”industry.”[1]. . [1] Brussels throws lifeline to stricken 3G2, Financial Times, 25 August 2002 Brussels throws lifeline to stricken 3G2, Financial Times, 25 August 2002




Introduction and backgroundIntroduction and backgroundThe dilemma between infrastructure sharing and The dilemma between infrastructure sharing and competition (2/4)competition (2/4)What was the European regulators’ approach on infrastructure sharing?What was the European regulators’ approach on infrastructure sharing?Germany:Germany:Licence position: Independent control of network emphasisedLicence position: Independent control of network emphasisedRegulatory changes / activities: Regulator has indicated it favours network sharing as long as competition Regulatory changes / activities: Regulator has indicated it favours network sharing as long as competition requirements met. 6 June 2001. RegTP, the German telecommunications regulator, announced that it would requirements met. 6 June 2001. RegTP, the German telecommunications regulator, announced that it would allow 3G licence winners to share the same radio base stations, towers and antennae. Use of logically distinct allow 3G licence winners to share the same radio base stations, towers and antennae. Use of logically distinct Node Bs is permissible as is use of logically distinct RNCs. Shared use of core network – MSC is not permitted.Node Bs is permissible as is use of logically distinct RNCs. Shared use of core network – MSC is not permitted.Netherlands:Netherlands:Licence position: Site sharing mandatory, in line with any technical constraints. RNC & Node B sharing allowed as Licence position: Site sharing mandatory, in line with any technical constraints. RNC & Node B sharing allowed as long as independent control is maintained.long as independent control is maintained.Regulatory changes / activities: “Collaboration must be limited to the joint construction and use of the UMTS Regulatory changes / activities: “Collaboration must be limited to the joint construction and use of the UMTS radio network (such as masts, aerials and network operations) In doing so, each operator must be able to radio network (such as masts, aerials and network operations) In doing so, each operator must be able to individually determine the quality of the network at its own discretion, so that in practical terms there is no individually determine the quality of the network at its own discretion, so that in practical terms there is no difference with a network constructed entirely by a single operator.” Must comply with competition regulations.difference with a network constructed entirely by a single operator.” Must comply with competition regulations.




Introduction and backgroundIntroduction and backgroundThe dilemma between infrastructure sharing and The dilemma between infrastructure sharing and competition (3/4)competition (3/4)What was European regulators’ approach on infrastructure sharing?What was European regulators’ approach on infrastructure sharing?France:France:Licence position: Independent control of network emphasisedLicence position: Independent control of network emphasisedRegulatory changes / activities: Regulatory changes / activities: Level 1: sharing of sites and passive elements, e.g. masts, electrical supply , etc is encouraged.Level 1: sharing of sites and passive elements, e.g. masts, electrical supply , etc is encouraged.Level 2: sharing of Antenna and connections is permittedLevel 2: sharing of Antenna and connections is permittedLevel 3: sharing of base stations is permitted, once the operator maintains full control over RNC functions.Level 3: sharing of base stations is permitted, once the operator maintains full control over RNC functions.Level 4: Sharing of backbone elements. – switches and routers – not permitted if pooling of frequencies, i.e. Level 4: Sharing of backbone elements. – switches and routers – not permitted if pooling of frequencies, i.e. when backbone and radio are shared.when backbone and radio are shared.Geographic sharing: permitted, but national roaming cannot be used to meet coverage requirements.Geographic sharing: permitted, but national roaming cannot be used to meet coverage requirements.




Introduction and backgroundIntroduction and backgroundThe dilemma between infrastructure sharing and The dilemma between infrastructure sharing and competition (4/4)competition (4/4)What was European regulators’ approach on infrastructure sharing?What was European regulators’ approach on infrastructure sharing?UK:UK:Licence position: Site and mast sharing encouraged. Inter-operator agreements subject toLicence position: Site and mast sharing encouraged. Inter-operator agreements subject tocompetition law.competition law.Regulatory changes / activities: Regulator published position May 2001 (see supporting Regulatory changes / activities: Regulator published position May 2001 (see supporting documentation of Oftel (Ofcom today) position)documentation of Oftel (Ofcom today) position)What are the participants’ point of views/experiences regarding the issue of balancing What are the participants’ point of views/experiences regarding the issue of balancing infrastructure sharing with competition?infrastructure sharing with competition?




Introduction and backgroundIntroduction and backgroundForms of infrastructure sharing (1/9)Forms of infrastructure sharing (1/9)

- relevant for both the fixed line and mobile segment - relevant for both the fixed line and mobile segment (but more case in the mobile segment)(but more case in the mobile segment)- in the mobile segment: different forms according to - in the mobile segment: different forms according to components (active or passive)components (active or passive)

- balance between passive and active components - balance between passive and active components

sharingsharing Khartoum – Sudan, 27 – 29 March 2011Khartoum – Sudan, 27 – 29 March 2011




Site sharing/collocation: Site sharing/collocation: - this is the basic form of sharing where operators agree to share - this is the basic form of sharing where operators agree to share available infrastructure, including site space, buildings and easements, available infrastructure, including site space, buildings and easements, towers and masts, power supply, and transmission equipment. towers and masts, power supply, and transmission equipment. -Site sharing is suitable for densely populated areas with limited -Site sharing is suitable for densely populated areas with limited availability; expensive sites such underground subway tunnels; and availability; expensive sites such underground subway tunnels; and rural areas with high transmission and power costs.rural areas with high transmission and power costs.




Introduction and backgroundIntroduction and backgroundForms of infrastructure sharing (3/9)Forms of infrastructure sharing (3/9)Network sharing:Network sharing:- sharing BTS equipment and sharing common networks, both circuit-- sharing BTS equipment and sharing common networks, both circuit-switched and packet-oriented.switched and packet-oriented.- operators typically share the RBS, RNC, mobile services switching - operators typically share the RBS, RNC, mobile services switching centre/visiting location register (MSC/VLR), and serving GRPS support centre/visiting location register (MSC/VLR), and serving GRPS support node (SGNSN)node (SGNSN)- each operator keeps its own individual home network that has - each operator keeps its own individual home network that has subscriber databases, services, subscriber billing and connections to subscriber databases, services, subscriber billing and connections to external networksexternal networks





Spectrum sharingSpectrum sharingspectrum sharing also known as spectrum trading. It entails operators - spectrum sharing also known as spectrum trading. It entails operators to lease their spectrum to other operators on commercial basis to lease their spectrum to other operators on commercial basis - spectrum = scare resource ; it is often underused by one operator in a - spectrum = scare resource ; it is often underused by one operator in a given area and sharing is viable option for two or more operators given area and sharing is viable option for two or more operators - Kenya’s project on LTE spectrum- Kenya’s project on LTE spectrum




Introduction and backgroundIntroduction and backgroundForms of infrastructure sharing (5/9)Forms of infrastructure sharing (5/9)MVNOs:MVNOs:- an entity with no network and no rights to spectrum- an entity with no network and no rights to spectrum- rely entirely on the infrastructure of another mobile network to offer - rely entirely on the infrastructure of another mobile network to offer services services - can leverage its own user base to generate subscribers (very common - can leverage its own user base to generate subscribers (very common in developed countries less common in developing countries; UK: in developed countries less common in developing countries; UK: Tesco, Carephone Warehouse ; South Africa: Virgin and Red Bull)Tesco, Carephone Warehouse ; South Africa: Virgin and Red Bull)




Introduction and backgroundIntroduction and backgroundForms of infrastructure sharing (6/9)Forms of infrastructure sharing (6/9)Interconnection: Interconnection: - often thought of in terms of the exchange of - often thought of in terms of the exchange of network traffic to allow users of different networks to network traffic to allow users of different networks to communicate with each othercommunicate with each other- can also be viewed as a form of sharing because - can also be viewed as a form of sharing because interconnection facilitates “last mile” sharing.interconnection facilitates “last mile” sharing.




Introduction and backgroundIntroduction and backgroundForms of infrastructure sharing (7/9)Forms of infrastructure sharing (7/9)National roaming:National roaming:- mandatory or voluntary national roaming allows new operators while - mandatory or voluntary national roaming allows new operators while their networks are being built to provide national coverage by means of their networks are being built to provide national coverage by means of sharing others mobile operators’ networks in specific areas.sharing others mobile operators’ networks in specific areas.- often only a temporary measure until the operator has built its own - often only a temporary measure until the operator has built its own networknetwork- shorter time frame for new entrants to launch their service with a - shorter time frame for new entrants to launch their service with a commercially viable coveragecommercially viable coverage




Introduction and backgroundIntroduction and backgroundForms of infrastructure sharing (8/9)Forms of infrastructure sharing (8/9)Towers companies:Towers companies:- set up of independent (or subsidiary of existing mobile - set up of independent (or subsidiary of existing mobile operators) company that manage BTSoperators) company that manage BTS- new roll out (example of 3G in Europe); purchase of existing - new roll out (example of 3G in Europe); purchase of existing towers of mobile operatorstowers of mobile operators-fair treatment of new entrant; cash injection for operators fair treatment of new entrant; cash injection for operators selling their sitesselling their sites




Introduction and backgroundIntroduction and backgroundForms of infrastructure sharing (9/9)Forms of infrastructure sharing (9/9)Unbundling:Unbundling:- mandatory offering by network operators of specific elements - mandatory offering by network operators of specific elements of their network to other operators, on terms approved the of their network to other operators, on terms approved the regulatorregulator- network component (switches) ; local loop unbundling (full - network component (switches) ; local loop unbundling (full unbundling, line sharing, bit stream access)unbundling, line sharing, bit stream access)

-also see supporting documentationalso see supporting documentation




Introduction and backgroundIntroduction and backgroundConclusionConclusion- more common in mobile segment than in fixed line segment because - more common in mobile segment than in fixed line segment because less complex to implement (implementation at the rollout stage versus less complex to implement (implementation at the rollout stage versus structural separation between infrastructure and service provisioning structural separation between infrastructure and service provisioning for existing fixed operators)for existing fixed operators)- balance between cost savings and competition (operators versus - balance between cost savings and competition (operators versus regulator) regulator)

-balance between infrastructure investment and sharing infrastructurebalance between infrastructure investment and sharing infrastructure




Infrastructure sharing trendsInfrastructure sharing trends

- emergence and multiplication of infrastructure providers such - emergence and multiplication of infrastructure providers such as tower companies and resale-based service providers such as as tower companies and resale-based service providers such as Mobile Virtual Network Operators (MVNOs)Mobile Virtual Network Operators (MVNOs)- rollout of high speed broadband services calls for more - rollout of high speed broadband services calls for more infrastructure sharing in developed and developing countries infrastructure sharing in developed and developing countries

- new regulatory challenges in a more complex infrastructure - new regulatory challenges in a more complex infrastructure

environment (NGN, NGA, fibre versus copper, LTE)environment (NGN, NGA, fibre versus copper, LTE)




Infrastructure sharing trendsInfrastructure sharing trendsThe tower company, a new type of infrastructure providersThe tower company, a new type of infrastructure providers

- trend among telecoms operator to part themselves from passive - trend among telecoms operator to part themselves from passive network components network components - need of cash, operations more geared towards services, etc- need of cash, operations more geared towards services, etc- examples in developing countries: Helios Towers, Eaton Towers, - examples in developing countries: Helios Towers, Eaton Towers, American TowersAmerican Towers- examples in supporting documentation- examples in supporting documentation




Infrastructure sharing trendsInfrastructure sharing trends

MVNOsMVNOs- trend towards more diversified service offerings at the retail level- trend towards more diversified service offerings at the retail level- more MVNOs in developed countries than in developing countries - more MVNOs in developed countries than in developing countries (regulatory and competition issues?) (regulatory and competition issues?) - examples in supporting documentation- examples in supporting documentation




Infrastructure sharing trendsInfrastructure sharing trendsThe rollout of high speed broadband services calls for more The rollout of high speed broadband services calls for more infrastructure sharing in developed and developing countriesinfrastructure sharing in developed and developing countries

- in developed countries: see in the USA, FCC Broadband Acceleration - in developed countries: see in the USA, FCC Broadband Acceleration Plan; EU Digital Agenda (2010-2020) Plan; EU Digital Agenda (2010-2020) - in developing countries: national and cross-borders fibre backbones - in developing countries: national and cross-borders fibre backbones (CAB and SA)(CAB and SA)- examples in supporting documentation- examples in supporting documentation




Infrastructure sharing trendsInfrastructure sharing trendsNew regulatory challenges in a more complex New regulatory challenges in a more complex infrastructure environment (NGN, NGA, fibre versus infrastructure environment (NGN, NGA, fibre versus copper, LTE)copper, LTE)- access regulation - access regulation - LLU on FTH- LLU on FTH




Mobile Networks SharingMobile Networks SharingIntroduction notes and material for the sessionIntroduction notes and material for the sessionThis role play session on mobile networks sharing is intended to provide the opportunity to This role play session on mobile networks sharing is intended to provide the opportunity to the workshop’s participants to the workshop’s participants to - reflect on infrastructure sharing issues in real time- reflect on infrastructure sharing issues in real time- analyse and resolve blocks and bottlenecks regarding infrastructure sharing - analyse and resolve blocks and bottlenecks regarding infrastructure sharing - apprehend infrastructure sharing issues from another stakeholder’s perspective - apprehend infrastructure sharing issues from another stakeholder’s perspective - share their experience regarding infrastructure sharing - share their experience regarding infrastructure sharing -improve negotiations skillsimprove negotiations skills

Outcomes of role play session:Outcomes of role play session:- to draft an infrastructure sharing plan (at least make sensible recommendations)- to draft an infrastructure sharing plan (at least make sensible recommendations)




Mobile Networks SharingMobile Networks SharingIntroduction notes and material for the sessionIntroduction notes and material for the sessionInformation on the country and the public ICT bodiesInformation on the country and the public ICT bodiesThe country and the various stakeholders (Ministry of ICT, regulator, mobile The country and the various stakeholders (Ministry of ICT, regulator, mobile operators) are fictitious in order to disconnect participants as much as possible operators) are fictitious in order to disconnect participants as much as possible from their daytime job and responsibilities. from their daytime job and responsibilities.

Country Name: TongaCountry Name: TongaMinistry of ICT: Mr Omar LeliMinistry of ICT: Mr Omar LeliRegulator: TRA (Tonga Regulatory Authority)Regulator: TRA (Tonga Regulatory Authority)Head of TRA: Mr Ahmed BashirHead of TRA: Mr Ahmed Bashir




Mobile Networks SharingMobile Networks SharingIntroduction notes and material for the sessionIntroduction notes and material for the sessionMarket overview: Market overview: - mobile penetration rate: just under 50% (leaves room for growth)- mobile penetration rate: just under 50% (leaves room for growth)- 3G services already launched by one of the mobile operator (Blue Telecom Ltd); - 3G services already launched by one of the mobile operator (Blue Telecom Ltd); the remaining two operators have received a 3G licence/spectrum but they the remaining two operators have received a 3G licence/spectrum but they haven’t launched commercial services yet.haven’t launched commercial services yet.

Name of the mobile operators:Name of the mobile operators:- Tonga Mobile Ltd (mobile arm of the incumbent)- Tonga Mobile Ltd (mobile arm of the incumbent)- Blue telecom Ltd- Blue telecom Ltd- All telecom Ltd- All telecom Ltd




Mobile Networks SharingMobile Networks SharingIntroduction notes and material for the sessionIntroduction notes and material for the sessionDate of entry in the market, market share, number of towers for each Date of entry in the market, market share, number of towers for each mobile operator mobile operator Market entry date, Market share, Number of BTSMarket entry date, Market share, Number of BTSTonga Mobile Ltd: 1998 - 18% - 700 Tonga Mobile Ltd: 1998 - 18% - 700 Blue telecom Ltd: 1998 - 76% - 2,300Blue telecom Ltd: 1998 - 76% - 2,300All telecom Ltd: 2005 - 6% - 300All telecom Ltd: 2005 - 6% - 300




Mobile Networks SharingMobile Networks SharingIntroduction notes and material for the sessionIntroduction notes and material for the session

Group formation: participants are divided in 4 groups of roughly equal Group formation: participants are divided in 4 groups of roughly equal numbernumberGroup 1: Blue TelecomGroup 1: Blue TelecomGroup 2: All TelecomGroup 2: All TelecomGroup 3: Tonga MobileGroup 3: Tonga MobileGroup 4: TRA representativesGroup 4: TRA representatives




Mobile Networks SharingMobile Networks SharingIntroduction notes and material for the sessionIntroduction notes and material for the session

- Memo from Mr Omar Leli, Ministry of ICT tasking TRA to investigate - Memo from Mr Omar Leli, Ministry of ICT tasking TRA to investigate the possibilities of introducing mobile networks sharing in the country the possibilities of introducing mobile networks sharing in the country in order to increase access to ICT in order to increase access to ICT services in the country. (see document 1)services in the country. (see document 1)- Meeting invitation letter from Mr Ahmed Bashir, head of TRA to the - Meeting invitation letter from Mr Ahmed Bashir, head of TRA to the mobile operators. (see document 2)mobile operators. (see document 2)


CoE/ARB Workshop On Infrastructure Sharing and LLU Session 1 Introduction and Background...

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