alternative network is being deployed. In fact, the very threat of that strategy being used may deter competitors from co-investing in the first place.In some markets, regulators have mandated network sharing in fixed networks. Planning and environmental regulations can also drive network sharing/co-investment by reducing the amount of passive infrastructure that can be built. This will increasingly be the case in urban areas for tower structures – but also potentially for underground deployment, as well. 2.4 Obstacles to Network Sharing Reasons why there is not more network sharing and co-investment Despite the apparent cost reductions and other benefits of network sharing and co-investment, it’s worth considering why they don’t happen more often and why many of them don’t seem to last. The commercial dynamics of sharing are complex, and governments looking to encourage or provide incentives for sharing arrangements need to keep in mind the various obstacles, which are explored in the following sub-sections. 2.4.1 Loss of independence By definition, a sharing arrangement means an operator will no longer have full control over network strategy and investment. A fully independent network operator can dictate the direction of its network development, roll-out strategies and vendor choices. Network sharing involves ceding some of this control, in return for the benefits that are available. This sometimes manifests itself in concern that the sharing partner (who is also a competitor) will stymie new competitive developments in the shared network that the other operator wishes to make. For a sharing deal to succeed, the operators must reach agreement on where full independence needs to be maintained, where agreement is required with the sharing partner, and where operational control may be ceded.Concerns over loss of independence mean that neutral or independent oversight is critically important in network-sharing transactions. This is one reason why parties often create new, separate joint ventures. There also may be benefits to bringing in third-party involvement – for example, either a third investor or an out-sourced management company. The success of the towerco model is partly due to the neutrality that an unrelated third-party management company can provide. Neutral or independent governance means that a subset of decisions may be entrusted to the joint venture or independent manager without requiring negotiation between the sharing parties. The need to reach agreement with the other operator over investment and deployment issues is likely to consume time and generate disputes that may threaten the success of the venture.2.4.2 Partner selection Having a compatible sharing partner will alleviate some of these concerns. The selection of a compatible partner involves considering whether the prospective partner has the same strategies for network deployment and investment. This is particularly the case with mobile network sharing. When two mobile operators have similar networks, neither party is likely to have a material advantage over the other in entering into the arrangement. If a large operator and a new market entrant are considering a network sharing deal, however, there can be real difficulties in reaching agreement on key issues such as valuation and allocation of benefits.2.4.3 Difficulty in reaching agreement It is never easy to reach agreement on a network-sharing deal with a competitor, due to the healthy distrust that each management team has of the other. Shareholder support can be important in getting a sharing deal across the line, including incentives for management to put in place and then implement the arrangement.A network sharing deal will often involve transferring existing assets into a joint venture structure (or to a third party) and decommissioning some sites. Disagreement over asset valuations in such cases is one of the main reasons why non-green-field network-sharing deals do not proceed. Negotiators also need to resolve transfer pricing issues and service levels for ongoing services, as well as vendor strategy. 60 Trends in Telecommunication Reform 2016