& cplSiteName &

Time for a Mobile NetCo?

LR Mobile Column
LR Mobile Column
LR Mobile Column
5/24/2007
50%
50%

With voice revenue growth stalled, and with extra costs inherent in providing emerging data services, the mobile industry is facing unprecedented pressure on profitability.

In response, operators are engaged in cost-reduction initiatives targeting every part of their technical operations, with radio access network (RAN) sharing emerging as the single most significant opportunity to restructure wireless industry economics, according to the latest Unstrung Insider report, RAN Sharing: Cutting the Cost of Mobile Broadband.

RAN sharing is about taking the most expensive pieces of an operator's network – the cell sites and towers, base station equipment, and the transmission network – and sharing this infrastructure with competitors. The idea is that, by reducing duplication of network assets, operators can deliver better services for less money.

Underlying this renewed wave of interest in network sharing is the realization that most mobile networks offer about the same quality of service as one another. The argument was made by Vodafone UK CEO Nick Read, speaking at a recent investor event about his firm's agreement with Orange UK to consolidate and share RANs. "Five, six years from now, it is our belief that coverage will not be a differentiator," noted Read.

He has a point, even if carrier personnel aren't supposed to talk like that. It makes the news these days when people can't get a signal. You can even make calls from the top of Mount Everest. (See Mobile Bench Mark and Success for Everest mobile effort).

For mobile carriers that have for years sold subscribers on the "unique" coverage and reliability attributes of their networks, this is a hard concept to come to terms with. But potential savings of up to 30 percent available on combined capex/opex make it hard to ignore the allure of RAN sharing, forcing carriers around the world to assess how it could work for them.

Other multinational carriers either involved in, or potentially evaluating, RAN sharing include Telefónica Móviles SA , Telecom Italia Mobile SpA (Milan: TIM), T-Mobile International AG , and Telefónica Europe plc (O2) . And it's not just Western European 3G operators in on the act: "Extensive network sharing will become the norm," said Sunil Mittal, chairman and managing director of India's largest carrier, Bharti Airtel Ltd. (Mumbai: BHARTIARTL), following a huge network sharing agreement with Vodafone Essar announced earlier this year.

From most perspectives, this is a logical way for the industry to evolve. After all, it doesn't pay to build two competing railways or highways along the same route, and "build it and they will come" has long been discredited as a sensible philosophy for investing in wireline network capacity. So why build and maintain two RANs to cover exactly the same area?

Instead, says Read, who used to run Vodafone's portal business, the focus should be on seeking competitive advantage in services: "We believe it is in the core network that we will drive long-term sustainable differentiation, and so we need to make sure that as [coverage] becomes less important, we have corrected our cost base and got the lowest unit cost possible to be successful."

Where RAN equipment and sites are shared, the next logical step is to consolidate these assets under a single management structure, perhaps set up as an independent network operating company, or "NetCo," that would provide access to higher-layer services companies, or "ServCos." Such a model would make at least theoretical sense. After all, selecting which ringtone to advertise on a mobile portal is a million miles from installing and maintaining coaxial feeder cable to a cell-site antenna.

Vendors, of course, have mixed feelings about the consolidation of customer networks. One example of positive thinking comes from Simon Beresford-Wylie, CEO of Nokia Networks , who has explicitly identified the likelihood of increasing separation between service provision and "bit pipe" provision, suggesting that operators would increasingly adopt the NetCo/ServCo business model.

"If you're an operator in Europe at the moment, starting to think about Long Term Evolution, and you think, 'Boy, there are four or five physical wideband CDMA operators in a given country,' how on Earth can [you] build a business case that justifies [being] one of five [LTE operators]?" Beresford-Wylie asked at Nokia's last capital markets day. "The question is whether there are going to be two or three [operators], and then behind that are some very strategic questions for the operator: 'What is my business? Is it brand? Is it channel? Is it service provision? Is it providing the plumbing?' Very big questions are coming."

– Gabriel Brown, Chief Analyst, Unstrung Insider


The report, RAN Sharing: Cutting the Cost of Mobile Broadband, is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.unstrung.com/insider.

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
More Blogs from LR Mobile Column
Mobile operators are coming to terms with their supporting role in the mobile apps world
Radio access networks are set for radical change
After a sluggish start, mobile banking will grow exponentially in the US market through 2015
LTE mobile device sales are expected to reach anywhere from 500,000 to 1M units in 2011
China's ranks of 3G subscribers will more than double this year, reaching 40M units
From The Founder
NFV's promises of automation and virtualization are intriguing, but what really excites service providers is the massive amount of money they could save.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
VMWare VP Brings Women Up With Her

8|16|17   |   6:49   |   (1) comment


It's an art and a science to make mentorship, inclusive leadership, diversity and promotion of high-potential women work, says Honore' LaBourdette, vice president of Global Market Development at VMWare.
LRTV Documentaries
5G Spectrum Wars – The Recap

8|15|17   |   2:22   |   (0) comments


Service provider 3 has filed a lawsuit against Ofcom over 5G spectrum auction in the UK.
LRTV Custom TV
Say What? Facebook Unleashes AI Anarchy – The Recap

8|7|17   |     |   (0) comments


A recap of the week's talking points on Light Reading's sister site, telecoms.com. Facebook AI programmers had a bit of a brain-fade as they allowed one of its AI applications to invent its ...
Women in Comms Introduction Videos
Fujitsu's Women Band Together to Help Girls Do STEM

8|2|17   |   9:35   |   (1) comment


Supporting women both inside and outside of Fujitsu is a top priority of the telecom vendor. Yanbing Li, Fujitsu Network Communication's director of System Software Development & Delivery, shares why it's important, but why there's still a long road ahead.
LRTV Custom TV
If You're Not First, You're Last – The Recap

7|31|17   |   08:18   |   (1) comment


In case you missed it, Amazon's 1% stock increase helped Jeff Bezos dethrone Bill Gates as the richest man in the world. Also, Taiwanese electronics manufacturer
Women in Comms Introduction Videos
AT&T's Tech President Preps Workforce for the Future

7|26|17   |   5:47   |   (10) comments


AT&T is focused on the software-defined network of the future and is reskilling its workforce to get ready too, according to AT&T's President of Technology Development Melissa Arnoldi.
Women in Comms Introduction Videos
Cisco: Mentoring Critical to Attract & Retain Women

7|19|17   |   6:40   |   (1) comment


Liz Centoni, senior vice president and general manager of Cisco's Computing System Product Group, shares why mentoring in all its forms is important for women and what Cisco is doing that's made a difference for women in tech.
LRTV Custom TV
Gigabit LTE With Snapdragon 835

7|12|17   |     |   (1) comment


At an event in Wembley stadium, EE used its live network to demonstrate gigabit LTE using a Sony Xperia XZ Premium smartphone with a Qualcomm Snapdragon 835 chip.
LRTV Custom TV
Implementing Machine Intelligence With Guavus

7|12|17   |     |   (0) comments


Guavus unites big data and machine intelligence, enabling many of the the largest service providers in the world to save money and drive measureable revenue. Learn how applying Machine Intelligence substantially reduces operational costs and in many cases can eliminate subscriber impact, meaning a better subscriber experience and higher NPS.
LRTV Custom TV
Unlocking Customer Experience Insights With Machine Intelligence

7|12|17   |     |   (0) comments


When used to analyze operational data and to drive operational decisions, machine intelligence reduces the number of tasks which require human intervention. Guavus invested in Machine Intelligence early. Learn about the difference between Machine Learning and Machine Intelligence.
Women in Comms Introduction Videos
Verizon VP Talks Network, Career Planning

7|12|17   |   4:49   |   (0) comments


Heidi Hemmer, vice president of Technology, Strategy & Planning at Verizon, shares how bold bets and the future of tech define her career.
Telecom Innovators Video Showcase
Masergy's NFV Journey

7|11|17   |     |   (0) comments


Ray Watson, vice president of global technology at Masergy, discusses the advantages and challenges in entering the still-maturing NFV market for the past three years.
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Intel CEO Leaves Trump Biz Advisory Board
Dan Jones, Mobile Editor, 8/15/2017
Are Cord-Cutting's Days Numbered?
Alan Breznick, Cable/Video Practice Leader, Light Reading, 8/14/2017
Orchestration Startup UBiqube Pivots Away From NFV
Carol Wilson, Editor-at-large, 8/15/2017
Verizon Video Woes Pile On
Mari Silbey, Senior Editor, Cable/Video, 8/14/2017
WiCipedia: Dolly Babes, Manifesto Backlash & 'Brotastic' Failures
Eryn Leavens, Special Features & Copy Editor, 8/18/2017
Like Us on Facebook
Twitter Feed
Animals with Phones
We Know a Tough Day When We See One Click Here
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.