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2.2.4 Comparison with single operator use of third parties such as tower companies or
deployment "towercos". Chapter 2

It can be debated whether co-investment models Sweden was one of the earliest countries to take
are superior to deployment by a single network up mobile network sharing and it appears that
operator that receives government incentives. these arrangements have been enduring (see Box
If the single network operator is required to 2.1).
provide open access to other operators on a
non-discriminatory basis, at cost-oriented prices, Australia was also one of the earliest countries to
then co-investment alternatives may not be adopt mobile sharing arrangements. For various
materially better. After all, It is likely to be easier to reasons, however, these arrangements did not
implement a bilateral arrangement between the survive for very long (see Box 2.2).
government and a single network operator (usually
the incumbent in the fixed sector), for a speedy Most of the cost savings from network sharing (up
network roll-out. to two-thirds) can be captured by sharing passive
infrastructure. The cost savings from sharing
On the other hand, the burden to regulate the active infrastructure are not as great, but they
incumbent operator will persist and may even are still sizeable – delivering approximately 20-30
intensify with the single operator model. If the per cent cost savings for mobile networks. An
single operator participates in the downstream approximation of cost savings from different types
retail market, there will still be an incentive to of mobile infrastructure sharing is shown in Figure
engage in discriminatory behaviour favouring the 2.1.
operator’s retail activities. All of this suggests that
a sharing arrangement is more likely to lead to a The pressure to share mobile network
reduced regulatory burden as compared to a single infrastructure is heightened by the explosion in
network operator model. consumer and business demand for data. Data is a
lower-margin business compared with earlier voice
and messaging services. At the same time, the cost
2.3 The development of network of running inefficient legacy networks is greater
sharing models when dealing with high data volumes. New LTE
networks, which are optimized for carrying huge
This section explains how network-sharing volumes of data, involve major new investments
arrangements developed and evolved in both the by operators.
mobile and fixed-service sectors.
"Green-field" situations that require entirely new
networks are generally considered to be easier
2.3.1 Evolution in the mobile sector and more suitable for sharing. This is one reason
why network-sharing deals are more frequent
Commercial network-sharing arrangements in emerging markets than in developed ones.
have been prevalent in the mobile sector, both Although there is some sharing of existing assets,
in developed and emerging markets. These LTE is a more green-field opportunity, and this
arrangements mainly developed voluntarily boosts the chances of a successful LTE network-
between mobile operators, with only fairly light- sharing deal.
touch encouragement from governments. Today,
approximately 15 per cent of mobile operators
engage in some type of network sharing.

Mobile network sharing is commonplace when
powerful competitive pressures make it necessary
for operators to reduce costs. This usually arises
in mobile markets where there are four or more
network-based competitors. In these markets,
there has been substantial passive sharing and
increasingly active sharing, including through the

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