BandwidthX Blog

The Future of Mobile Network Sharing: Game Changing Potential in the Cities

Mike Kleiman

Welcome to the BX Blog! As it is now a new year and fresh decade, we would like to share our perspective, ideas, and innovation. It is my pleasure to share our first post.

The mobile industry is on the cusp of the 5G revolution that brings both the promise of unprecedented expansion of the mobile economy and the uncertainties around the ability to monetize new 5G use cases. At the same time, MNOs must continue to invest in additional 4G network capacity because 5G coverage and devices will take years to propagate. Combine these elements with high CapEx and flattening revenue, and they create huge challenges for mobile network operators (MNOs) around the world. As can be seen from the latest numbers released by the 2019 GSMA Intelligence Brief.

These challenges are driving increased interest in mobile network sharing, which has been growing consistently over the last several years.

Mobile network sharing amongst competing MNOs offers at least a partial solution for cost savings, while also offering improved network coverage. Therefore, it is not surprising that operators around the world are increasing focus here as market dynamics intensify and the need for further cost reduction becomes critical. As McKinsey discussed in their article “Network sharing and 5G: A turning point for lone riders.”

However, we have yet to see even a fraction of the true potential savings that could be created through effective network sharing. Literally billions of dollars of savings have been left on the table to date. Why? Because existing methods of active network sharing are problematic in densely populated urban areas – primarily due to regulatory, technical and competitive factors. Most of the world’s population lives in urban areas where network capacity deficiencies are most prevalent. Densely populated areas, with multiple overlapping networks also offer the best opportunities for improving service and efficiency through cooperation.

Regulators have long embraced passive network sharing agreements (towers, cabinets, power, and other non-radio related assets); however, they have often limited active sharing agreements (MORAN—Mobile Operator Radio Access Network, MOCN—Mobile Operator Core Network, and CN—Core Network sharing) to protect consumer interests and so-called brand differentiation. Regulators are generally apprehensive that too much cooperation amongst competing operators will lead to anti-competitive behavior and ultimately hurt consumers. In their view, active sharing arrangements could discourage facilities-based investments, reducing incentives for robust competition and edging out smaller operators. Thus, many regulators have imposed restrictions on active sharing arrangements, particularly in densely populated urban areas.

MNOs, on the other hand, have been more concerned with the competitive challenges of sharing in densely populated cities. The stronger performing network operator that has invested the most in coverage and quality of experience does not want to see its weaker performing competitor steal its thunder. Given existing methods of active network sharing, their concerns are totally justified.

Sound techniques for network sharing in dense urban areas that both optimize capacity exchange and mitigate regulatory concerns has so far eluded the mobile industry. The ideal solution should simplify load balancing across network ownership boundaries, give participating operators control over how capacity is shared, and enable them to preserve competitive differentiation. For example, the stronger network should not lose its competitive edge unless it chooses to do so. In addition, the solution should enable participants to sell excess capacity, monetizing the underutilized perishable asset.

At BandwidthX, we have long been thinking about this unique problem in dense urban areas. Thus, our most recent solution is a carrier-neutral platform that enables MNOs to exchange RAN capacity in a controlled manner. The platform, called Xpacity, was developed specifically to take advantage of opportunities in dense urban areas. It is different from current active network sharing or national roaming, which are typically restricted to rural, coverage-limited areas, or done in a broad wholesale fashion. Xpacity complements these existing sharing models with a unique new approach. It can preserve competitive differentiation, create huge CapEx savings, and improve performance for all participating networks. In fact, a recent study in Europe clearly demonstrates how Xpacity could save over 1€ billion per year in just one major European market.

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