PA White Paper 3
Transcript of PA White Paper 3
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8/7/2019 PA White Paper 3
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Edition 12
For operators and manuacturers in wireless telecoms
On WirelessEdition 12
Extract Article
networksharingis your marriage made in heaven?
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networksharing
is your marriagemade in heaven?Most network operators would jump at the chance o saving as
much as 40% o the costs o running their network. Too good to
be true? Well some people that we have spoken to certainly think
so and it goes without saying that i this was a quick and easywin, most people would by now already have decided to do it.
So how do we do it?
by Mark Neild,Alex Wright andEd Savage
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This paper explores some o the challenges involved in making the decision to
share a network with another operator. In particular, it examines such issues as:
Deciding who to share with
Agreeing the most appropriate scope
Structuring the negotiations to achieve a quick agreement.
What are the real benefits?
Most o the business cases that we have seen or network sharing suggest
that the long term benets amount to around 2535% o total network costs.
O course the achievable savings depend very much on which elements o the
network are shared and this is dealt with later. The ollowing simple example
gives a favour o what is possible.
Operator A
Operator B
Building a new greenfield
Node B site
Civil engineering 50% saving
I&C 50% saving
Equipment 40%
Operating and maintaining
shared Node B Site
Field force 25% saving
Operations unchanged
Logistics unchanged
(unless vendor the same) Lease/estates 30%
Power unchanged
Identifying a partnerthat has not yet
achieved ubiquitous
coverage could delivera return on acquire
and build costs...
A site share will deliverless equipment, lease
and logistics savings
than equipment sharingbut at the compromise
of flexibility...
Using the same vendoror managed service
provider can offer
additional synergysavings as can
combining operations...
The joint network canbe planned to deliver
an overall performance
improvement or tominimise future opex...
+ x 14,000 sites
What immediately springs out rom these gures is the act that the higher
the share o new build in the overall costs, the greater the ultimate benets.Intuitively this makes sense as it avoids all the messiness o consolidating
legacy inrastructure. However it does raise an important point. The degree
o alignment in the plans o the sharing operators or their network deployment
will have a very signicant impact on the ultimate benets. Choosing your
partner with care and orming the right pre-nuptial agreement is vital to
ultimate success. We will return to these points later on. In reality however,
ew operators have the luxury o ignoring the legacy inrastructure so it is
important to strike the right balance between the costs and complexity o
consolidating legacy networks with the higher benets o ull sharing.
Typically we nd that sharing around 2/3 o the inrastructure is about the
best that can be sensibly achieved without agreeing a roaming arrangement,
which is not possible everywhere.
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Several sharing deals that we are aware o have allen oul o a ailure to agree
the governing principles up ront. Although this might be a simple error in the
process, we are aware o companies using RAN share discussions or more
sinister purposes, which is why we suggest testing the resolve o each party at the
outset. A simple understanding o what each party wants rom the deal and what
each party will contribute is a good start, but in many ways it is more importantto think beyond the honeymoon to lie in partnership in the uture. Partnerships
require some sacrices to unlock the benets and because a network sharing
deal makes or a messy divorce, exploring together the ull range o ways o
working is a necessary precursor to shaping the commercial construct.
Based upon our tried and tested Partnering Wheel, we have devised a number
o tests to determine whether or not there is a good strategic t. These go well
beyond the obvious questions o how many sites? Where are they? and what is
the technology? as shown on page 5.
Following on rom an agreement on scope, the chie question is the extent to
which each party shares a common purpose.
How long should the engagement be?
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Establisha
Drive
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ip
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andcapability
Build
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tworks
Isourtechnical
PAsPa
rtnerin
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n we w
orktoge
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asequ
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Arewe
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from
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I
s
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wha
taretheprojectcosts?
How
longwillit takeand
an asse
t valu
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Canwe
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gree
ben
efits?
Are
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Whatis
thescale
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and
Entryand exit
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tegy
I one is a ervent believer o 3G while the other would preer to sweat its 2G
assets, the sacrice might just be too great. Likewise a shared commercial
perspective is going to be required. The husband who always has to buy the
latest, shiniest, ully loaded gadget makes an unhappy bedellow to the wie
who is careul and considered with her cash preerring the tried and tested to
the new and whizzy.
Who else is in the marriage? Are there parents or other partners who might
interere with the eective governance o the arrangement or maybe there are legal
impediments such as regulatory authorities? Finally is it a marriage o equals?
At this stage we also need to consider the structure o the service delivery
vehicle. Typically we have ound that a Joint Venture with equal shares works
best, so long as it is not dominated by the sta o one side or there is a
pervading sense that only one way o working will be entertained. This is
a bad sign or the uture.
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How many should we invite to the wedding?Although it may seem blindingly obvious, the question o scope becomes more complex the more youscratch the surace. It is generally accepted that the RAN is ok to share. Keeping the Core is essential
or preserving uture competition and fexibility on VAS. But in deciding how to share the RAN, the rst
decision is whether to share the network equipment or just go or a co-location model. Both oer benets,
but depending upon the time horizons one usually looks more attractive than the other. Sharing sites is
less complex, but potentially delivers less benets and in many cases has already been achieved to
some extent anyway. Site sharing needs more space, which can cost more money and causes problems
where space is in short supply. However on the fip side, sharing equipment has a lot o complexity
attached to it. A favour o the range o considerations or 2G sharing is illustrated on page 7.
Similar considerations apply to 3G, but the case
is much simpler as or most operators it will have
a longer lie, but or many we have spoken to,
the uture or 2G is still relatively unclear.
Another constraint is the regulatory environment.
It is arguable that in developed markets very
ew operators compete on the basis o coverage
and that because networks largely comprise
components and skills available to all, there isno real competitive advantage in the network.
Nevertheless regulators and some parts o some
operators still believe that the network is a source
o competitive advantage and that sharing some or
all o it is tantamount to operating a cartel, aiding
and abetting a competitor or giving away the crown
jewels. These issues need to be worked though in
a rigorous but sympathetic way. Tempting though it
may be, taking the approach that well we will just
have to educate them may not wash with those
in a position to block the deal. Ater all they may
have a point.
One other area to consider careully is the scope
o the transmission whether this is backhaul rom
the cell sites or the core network. With the onset
o convergence, in many companies this is notalways very separable. Transmission architecture
can also add signicant complexity when it comes
to site rationalisation, particularly i the site you
might otherwise choose to shut down just happens
to provide the connectivity hub to a dozen others
and is only located in that awkward position or
that reason.
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BTS equipment
1. If BTS hardware is incapable of supporting
RAN share functionality, then new BTS
equipment will be required; raises the
question of the time over which the
investment can be recovered before
switching off 2G.
2. If BTS hardware is capable of supporting
RAN share functionality, then a S/W
upgrade will be required.
3. If the operators do not operate in the same
bands and the BTS hardware is not capable
of supporting both 900 MHz and 1800 MHz
in the same unit, additional equipment will
be required to support an equipment share
scenario.
BTS equipment
1. If the traffic on a shared BTS increases,
additional transmission capacity within the
BTS unit will be required, either via a S/W
upgrade or H/W expansion to provide the
additional E1 ports.
Transmission equipment
1. If the traffic on the BTS increases,
a proportionate increase in the transmission
backhaul link, either leased line or
microwave, is required. Expansion of
microwave often only requires a S/W
upgrade, however, older units may require
H/W expansion/ replacement. Leased line
expansion usually requires additionalphysical links to be installed, possibly
requiring significant installation costs.
BSC
Components within scope
of 2G RAN share
BTS
BTS BTS
BTS
Transmission
network TDM
Operator 1core network
Operator 2core network
BSC equipment
1. If operators choose to share BSC units,
the equipment will need to be upgraded
to support any additional BTSs, additional
subscribers/ busy hour call attempts,
additional traffic kErlang/MB. Initially this will
be achieved via S/W upgrades and then via
H/W and S/W upgrades to a maximum
configuration.
2. If the maximum configuration is exceeded,
then additional BSC units will be required.
This site expansion will require additional
space and may involve additional significant
ADC activities.
4. If the operators do operate in the same
bands (900 MHz or 1800 MHz), insufficient
TRX expansion capacity may be available
to support the traffic of both operators,
requiring additional BTS units.
5. If the vendor equipment is different for each
operator, there may be issues with the
quality of service experienced by the end
user when handing over between BTS sites.
Antenna equipment
1. If operators choose to share antennas,
additional combiners may be required and
the antennas may need to be replaced with
either dual/tri band models to cover the
required radio frequencies; 900 MHz and
1800 MHz and 2100 MHz (if site is also 3G).
2. If operators choose to use separate
antennas, there may be limitations upon the
site infrastructure in terms of the number of
feeders or antennas that can be supported
by the mast.
Associated site modifications
1. If the BTS unit is required to be replaced/
expanded for additional bands/capacity,
then modifications to the site infrastructure
may need to be carried out; eg additional
reinforcement for roof top installations.
2. If no further space is available on the site for
additional equipment, then a new site may
need to be selected/constructed.
BTS related areas to be considered:
2. If microwave link expansion is required,
the associated link budget may no
longer be capable of supporting the
required bandwidth. Therefore link
re-dimensioning or equipment
replacement may be required to
maintain the transmission link.
3. If operators choose to share E1 links,
this functionality may not be present
in older equipment, requiring either a
multiplexer or new transmission
equipment.
4. If there is an overall increase in the
transmission network requirements,
an associated expansion of aggregation
units may be required; via either a S/Wor H/W upgrade.
Transmission related areas to be considered: BSC related areas to be considered:
1
1
2
2 3
3
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I you are thinking that the potential
rewards rom network sharing make
it worth pursuing, tackle the issueshead on; there is no easy exit so it
is best to get it right rom the outset.
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The process o agreeing the deal is almost important as what
is in the deal itsel. It is a big step and there is an awul lot riding
on it. Although in the section covering the engagement we
covered some o the considerations or picking the partner,
it is in this section that we discuss how you actually do that.
As we discussed previously, one o the key constraints is the
degree to which either organisation or the competition authorities
wish each party to bare their soul to scrutiny by the other party,
at best a complete stranger and at worst a long standing rival.
Yet that is exactly what is required to make these things work.So how do we do this?
Optimised output
Mobile
operator
Mobile
operatorNon-sensitive data
Competition
sensitive data
aggregate
Our experience is that the only way is to use a neutral intermediary that
can quickly resolve some o the more contentious issues such as network
valuation. Either party can be open and honest i they know that even i the
deal alls apart, they have not shared their deepest secrets with a long-standing
competitor. Furthermore in some countries the competition authorities simply
will not allow competitors in the market to share strategic plans and certainly
not the deals that they have struck with suppliers. The picture above illustrates
how a neutral third party might handle such competition-sensitive material or
the benet o both parties.
Finally, i you are thinking that the potential rewards rom network sharing
make it worth pursuing, tackle the issues head on and dont expect it to be
easy; there is no easy exit so it is best to get it right rom the outset.
In church or at the registry ofce?
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