Sharing Networks, Driving Growth: Itunews

itunews
Sharing networks,
driving growth
06/2017
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(Editorial)
Sharing networks, driving growth

Houlin Zhao, ITU Secretary‑General
I
n an era of great change for the information and
communication technology (ICT) industry, sharing network
infrastructure and services has steadily become more
important than ever.
More and more companies are sharing the networks in order to

lower costs, maintain profit margins and focus on innovative ser-
vices to meet shifting customer demands. This dynamic requires
unprecedented collaboration. Incumbent mobile network
operators are increasingly working with mobile virtual network
operators and enablers (MVNO/Es), tower companies, Internet
companies — and a growing range of different industry and pub-
lic-sector players.
The increase in telecoms infrastructure sharing has allowed for a

more efficient roll-out of next-generation networks. The sharing
of towers and other passive equipment also translates into the
More and more sharing of expertise and best practices.
companies are
sharing the networks As you will read in this edition of ITU News Magazine, the rise of
tower companies (“towercos”) — which now own more than two-
in order to lower
thirds of the world’s 4.3 million investible towers and rooftop sites
costs, maintain
profit margins and
— has demonstrated how specialized expertise can turn passive
infrastructure from a depreciating asset to a potential source of
1
focus on innovative long-term, recurring revenue. Reflecting the changing landscape
services to meet of infrastructure sharing, and the need for all players to work
shifting customer together, two of the biggest tower companies, American Tower
demands. and China Tower, joined ITU in 2017.
ITU News MAGAZINE 06/2017
You will also hear from several regulators who provide important
insights into how infrastructure sharing has worked in their coun-
tries to boost competition and improve economies of scale in
order to accelerate the development of our digital economy.
(Contents)
Sharing networks,
driving growth
(Editorial) Cover photo: Shutterstock
1 Sharing networks, driving growth

Houlin Zhao
ITU Secretary‑General
(Infrastructure sharing for development)

4 Telecommunications infrastructure sharing in brief
5 Your guidelines for ICT and broadcasting infrastructure
sharing within Southern African Development
Community (SADC) countries ISSN 1020–4148
itunews.itu.int
6 A call for infrastructure sharing in Africa Six issues per year
Funke Opeke Copyright: © ITU 2016
CEO, MainOne Editor-in-Chief: Matthew Clark

Art Editor: Christine Vanoli
Editorial Assistant: Angela Smith
(A regulatory point of view)
Editorial office/Advertising information:
9 Telecom infrastructure sharing regulation policies in Tel.: +41 22 730 5234/6303
Brazil Fax: +41 22 730 5935
E‑mail: [email protected]
Juarez Quadros
President, ANATEL, Brazil Mailing address:
12 Balancing infrastructure sharing — The Danish experience

International Telecommunication Union
Place des Nations 2
Morten Bæk CH–1211 Geneva 20 (Switzerland)
Director General, Danish Energy Agency Disclaimer:
Opinions expressed in this publication are those of the
16 India’s experience in passive network infrastructure authors and do not engage ITU. The designations em-
sharing ployed and presentation of material in this publication,
R.S. Sharma including maps, do not imply the expression of any

Chairman, Telecom Regulatory Authority of India (TRAI), India opinion whatsoever on the part of ITU concerning the
legal status of any country, territory, city or area, or con-
19 Supporting infrastructure sharing in Kuwait cerning the delimitations of its frontiers or boundaries.
The mention of specific companies or of certain prod-
Eng. Salim Muthib Al-Ozainah ucts does not imply that they are endorsed or recom-
Chairman and CEO, Communication and Information mended by ITU in preference to others of a similar
Technology Regulatory Authority (CITRA), Kuwait nature that are not mentioned.
All photos are by ITU unless specified otherwise.

(Contents)
23 Infrastructure sharing and network competition in Spain

— Regulating for network competition
José María Marín Quemada
President, Spain’s National Authority for
Markets and Competition (CNMC)
(Towercos — a growing market)

27 Independent towercos inaugurate an era of infrastructure
sharing
Kieron Osmotherly
Founder and CEO, TowerXchange
34 Networks and connectivity — Sharing in order to improve

citizens’ lives
Tobias Martínez
CEO, Cellnex Telecom
(Identifying future trends)

37 Five trends in shared mobile infrastructure
By Jennifer D. Bosavage
3
Telecommunications
infrastructure
sharing
2
Passive sharing
in brief The sharing of non-electronic infrastructure

such as sites, towers, poles, ducts, trays,
shelters, equipment rooms, power, HVAC,
security, etc.
main
5
Active sharing
types The sharing of active (i.e., electronic)
infrastructure in the access or core network,
such as spectrum, switches, and antennae.
dimensions
Technology Geography Architecture Partners Sourcing
For example: 2G, The geographical The architectural Potential partners in Sourcing
3G, 4G, 5G, WiFi, dimension concerns dimension defines a sharing deal possibilities for
xDSL, DOCSIS, etc. where in the country the (passive and include any entities sharing
the sharing will active) assets and such as mobile and infrastructure,
occur. related activities that fixed-network include unilateral,
are shared. operators, etc. bilateral, or joint
venture.
Several key And some potential risks

benefits
For sharing parties
• Partner conflict.
• Reduction in capital expenditure • Technical incompatibilities.
(CapEx) and operating
expenditure (OpEx).
• Breakdown in end-to-end customer experience management. 4
• New/enhanced services.
• Faster geographic rollout. For regulatory authority/competition authorities
• Improved service quality. • Delays.
• Lower prices. • High prices.
• Increased tax revenues for • Disputes.

governments.
Source: SADC ICT and Broadcasting Infrastructure Sharing Guidelines

Your guidelines for ICT and broadcasting

infrastructure sharing within Southern African
Development Community (SADC) countries
Policies and Plans
Infrastructure Sharing
Guidelines
Licensing Regime Regulatory Mandate
The ITU’s World

Allowing for regional harmonization in:
Telecommunication
Achieving an enabling policy and regulatory framework
Development Conference
conducive to infrastructure sharing.
(WTDC) Africa Regional
Identifying existing platforms (transmission and
Initiative 2 aims
contribution networks) suitable for infrastructure sharing in
to strengthen and
SADC countries.
harmonize policy and
Enabling competition in access networks and providing
regulatory frameworks for
positive environmental impacts.
the integration of African
Providing positive incentives to roll out to underserved areas.
5
telecommunication/ICT
Improving quality of service, especially in the rural areas.
markets.
Ensuring positive impact on the wholesale and retail
information and communication technology (ICT) and
As part of this initiative,
broadcasting services prices.
the Communications
Regulators’ Association
of Southern Africa
(CRASA), in collaboration
with ITU, initiated a
Download your guidelines here. project to establish these
guidelines.
Shutterstock
A call for infrastructure
sharing in Africa
Funke Opeke
CEO, MainOne
Network sharing
Seven submarine cable systems and an estimated com- appears increasingly
bined capacity of 40+Tbps completed in sub-Saharan
Africa since 2009, have transformed the availability of inevitable if African
bandwidth in Africa’s coastal regions. Most African coun- operators are going
tries now have some form of fiber connectivity to one
or more submarine cable landing stations. Meanwhile,
to survive. 6
competition has crashed the wholesale price-per-mega- Funke Opeke
bit-per-second by over 80%. These are important gains.
Still, it remains astounding that Africa still has such low

bandwidth penetration levels. With 29% Internet pene-

tration, Africa has the lowest Internet rate in the world,
compared to other continents: Western Europe (84%),
Middle East (60%) and North America (88%).
Also, major cities continue to receive the major- Take cashless banking for example: it’s amaz-
ity of telecoms investments while developing ing to watch the significant shift from cash to
areas are neglected because they do not consti- cashless banking. What has happened could not
tute a promising market. have been achieved without a high degree of
collaboration and considerable push from bank-
To address these issues, it’s becoming clearer ing regulators. Perhaps this is a model African
that information and communication technology telecom regulators can use as a model.
(ICT) players will have to come together more
to share network infrastructure and services.
Indeed, with continued erosion of profit mar- Infrastructure sharing in Nigeria
gins, as well as average revenue per user shrink-
ing year on year, and encroaching freemium Fortunately, Africa holds the answers to most of
services, network sharing appears increasingly its problems and already has in place many of
inevitable if African operators are going to the building blocks required to put the puzzle
survive. together.
The continent is already host to numerous

Working together works terrestrial fiber operators including mobile
Network Operators (MNOs), Internet Service
Industry sources cite that Africa’s telecommuni- Providers (ISPs) and broadband wholesalers,
cation companies (telcos) can potentially yield who have invested considerably in network
overall cost savings between 15% and 30% infrastructure. According to International
and reduce capital expenditure up to 60% by Telecommunications Union (ITU), such invest-
combining resources and reducing individual ments in Nigeria alone total USD 68 billions as
infrastructure needs. This would reduce the at July, 2016.
pay-back period of investments and also ensure
faster deployment of new technologies. However, these investments belie the infra-
structural deficit in Nigeria. Most of the existing
Collaboration on network infrastructure and terrestrial fiber is centered in Lagos, Abuja
services is a proven global model. As such,
incumbents in Africa will perhaps have to con-
and a few other cities and the major highways
interconnecting them. This makes development
7
sider opening up their networks to generate uneven.
new revenue even if that means they will get a
“smaller piece of the pie.” Furthermore, there is limited infrastructure-shar-
ing across the market, manifesting in multiple
This is an opening step that many African coun- fiber transport networks operated by different
tries will need to go through, because in the companies serving the same high-traffic areas.
most advanced markets, we’re seeing infrastruc- Many Nigerians, particularly those in remote
ture sharing as well as a range of non-traditional areas, must rely instead on other technologies,
players working with larger operators to provide such as satellite and microwave for access to
greater services that improve lives well beyond mobile base stations, and these services come
mere connectivity. at a high price.
While a few operators are truly open access, In Africa, however, structural separation has only
there are concerns that others playing in the manifested in the sales of towers by mobile
wholesale and retail segments of African network operators (MNOs) to tower companies.
markets are using their leverage to squeeze Since 2010, sub-Saharan Africa has seen MNOs
the margins of smaller players, who are also divest almost 40 000 towers to independent
their customers, via predatory pricing, refusal towercos in a total of 28 transactions. Over the
to supply wholesale capacity on certain routes, last few years, IHS, for example has acquired the
refusal to offer high capacity wavelengths or majority of the towers belonging to MTN, Airtel
dark fiber access, or provide access to duct and 9Mobile in Nigeria, among others.
services. A 2013 Determination of Dominance
study by the Nigerian regulator, Nigerian
Communications Commission (NCC) cor- MainOne’s role as infraco for Lagos
roborated this when it mentioned two of the
country’s biggest players as dominant play- The Towerco example has validated a model
ers in transmission services with joint control for Fiber Infracos delivering shared fiber con-
of 62% of the nation’s terrestrial transmis- nectivity services adopted by the Nigerian
sion infrastructure. Communications Commission. MainOne is one
of the leaders in infrastructure investment in
Thus the capacity to build the networks that are Nigeria with submarine cables capable of deliv-
required already reside on the Continent, but ering up to 19.2 terabytes per second and is the
improved access will require a re-direction of fiber infrastructure company (infraco) licensee
where and how new networks are built going for the Lagos region. However, lack of effective
forward. national, regional and last-mile distribution
infrastructure has constituted a barrier to lower
costs and broader Internet adoption in the eight
A look at Africa’s Towercos countries it currently serves.
In advanced markets, regulators have tried to The company has been a major proponent of a
address the obstacles caused by “bottlenecks” broadband policy and an open access national
that arise when infrastructure is controlled
by one or more dominant operator through
backbone network in Nigeria and is poised to fill
critical infrastructure gaps and enable broad-
8
structural separation. In the United Kingdom, for band services in the largest mega city in sub-Sa-
example, BT OpenReach ensures other opera- haran Africa.
tors can compete with the incumbent BT for the
delivery of services.
GettyImages
Telecom infrastructure
sharing regulation
policies in Brazil
Juarez Quadros
President, ANATEL, Brazil
RAN sharing has

been increasingly
T
he issue of infrastructure sharing in used due to its
telecommunications is extremely important
for regulation. Since the resources used to evident benefits for
provide the service are finite, whether in the development 9
passive or active infrastructure, infrastructure sharing is
a key element in promoting competition among market
of the sector.
players, with a reasonable investment value and a fair Juarez Quadros
price to be charged to the consumer.
In Brazil, a country of continental proportions, it is

necessary to make infrastructure competition viable.
Considering all public policies to promote the expan-
sion of telecommunications in the country, it would be
impracticable not to take this into account when devel-
oping such policies.
Infrastructure-sharing policies that increasing the value of the business, optimizing

stand out the allocation and use of infrastructures when
duplication is impossible, and guaranteeing
Among public policies that have favoured the compliance with regulatory obligations. Finally,
sharing of infrastructure and networks in Brazil, it should result in an improvement of the condi-
the following stand out: tions of the service provided to the users.
The Decrees of the General Plan of the As can be observed in Brazil, some infrastruc-
Universalisation Goals (PGMU) of the public ture sharing is in full operation. This includes
switched telephone network promoted radio base station sharing, radio access network
access to the fixed telephone service and, (RAN) sharing, national roaming, mobile virtual
later, the broadband service, in a universal network operators (MVNOs), and the sharing of
and equal manner to the majority of the electricity distribution poles.
country’s population. Because of this, it was
necessary to use the electricity poles to The sharing of infrastructures that support tel-
provide the service. ecommunications networks — after the publica-
tion of the Antenna Law (Law nº 13.116/2015),
The bidding documents of the radio later regulated by the Revision of the old
frequency for personal mobile service Resolution nº 274/2001 of Anatel that resulted
obliged players interested in radio in the Resolution No. 683/2017 — is mandatory
frequencies to buy the radio frequencies in its excess capacity, except when the technical
not only in the areas in which they could reason for the refusal is justified. Moreover, the
generate economic interest, but all over established obligation foresees that aspects of
Brazil, including service obligations for urban, historical, cultural, tourist and landscape
all Brazilian municipalities. This made it patrimony will be preserved. Here we sought
necessary to share the mobile base stations a way of organizing municipalities without the
for the provision of the service. unnecessary redundancy of infrastructure.
The Brazilian Federal Government, represented

primarily by the National Telecommunications
Agency — Anatel — has historically been creating
Increased use of RAN sharing —
benefiting ICT sector development
10
regulatory mechanisms to promote infrastruc-
ture sharing. This regulatory premise was born Radio access network (RAN) sharing has been
with the General Telecommunications Law, and increasingly used due to its evident benefits
has evolved over the years through specific reg- for the development of the sector, as a way of
ulations for each aspect of infrastructure sharing. optimizing the use of the scarcest resource the
sector has: radiofrequencies. Radio spectrum
The sharing of the finite resources means to sharing throughout the spectrum is one of
provide the telecommunication service while Anatel’s spectrum management goals.
reducing the cost of investing in networks,
Radio-spectrum sharing is regulated by the obviously essential to the energy sector, which
Radio Frequency Spectrum Use Regulation, uses them to distribute energy in municipalities.
and the Radio Frequency Use Conditions Thus, Anatel and the National Electric Energy
Regulations, in order to guarantee the efficient, Agency (ANEEL) issued three joint regulations,
rational and adequate use of the resource approved by Joint Resolutions No. 001/1999,
under the LGT (the Brazilian general telecom- No. 002/2001 and No. 004/2014, to address the
munications law), as long as there is technical main issues of inter-sectoral relations, technical
feasibility, and it meets the public interest and or commercial aspects.
economic order.
It should be pointed out that, since it is an
National roaming is an obligation foreseen essential infrastructure to support the construc-
in infrastructure-sharing bidding documents, tion of networks, the amount that electricity
and competition is guaranteed within munici- distributors charge from telecommunication
palities when the incumbent does not have an service providers for the use of each attachment
economic financial advantage over new entry point on the distribution poles directly affects
players. This gives the consumer the power to the amount to be charged to users of the tele-
choose a different operator from the sole opera- communication services using the infrastructure.
tor who is physically present at the location.
This specific point is a constant debate among
With the promulgation of a specific regula- the sectors. It is important that the price is fair,
tion, approved by Resolution nº 550/2010, it equitable, and that it does not harm those
became possible to exploit the Personal Mobile involved, nor the distributors, to receive a
Service (SMP) — by SMP providers (mobile virtual reasonable rent value, and for the providers
network operators (MVNOs)), through a virtual not to pay an exorbitant amount for the use of
network. This allows the existence of a greater the infrastructure.
number of personal mobile service providers
in the market, with innovative proposals of Therefore, among the forms of infrastructure
facilities, conditions and relationship with SMP sharing observed in Brazil, all have their regu-
users. By offering a larger set of SMP providers, latory burden, either to compel some sharing,
competition is favoured within the sector, which
can reduce the users’ final costs.
or to favour another. Nevetheless, the reg-
ulator aims to establish the necessary basis
11
for infrastructure sharing to the benefit of all
stakeholders.
Joint regulations for sharing electricity
distribution poles More importantly, it is always advisable to foster
competition in the sector, thus favouring the

The sharing of electricity distribution poles final consumer, either with an improvement
by telecommunication service providers has in the quality of the service, or with a possible
always been a sensitive issue for the sector, reduction in the prices charged by the sector.
since it is an essential infrastructure to support
the construction of networks, besides being
Shutterstock
Balancing
infrastructure
sharing — The Danish
experience
Morten Bæk
So far the
Director General, Danish Energy Agency
experience in
Denmark has been
increased coverage,
12
D
enmark enacted the Danish act on the prices have been
erection and shared use of telecom towers reduced, and
in 1999. The main goal of the act was to
protect the environment against the visual
competition does
and physical impact of masts and towers. When the not seem to have
public database on antennas was established in 2004,

been affected in
the focus was to provide the public with information
about the location of mobile antennas, in view of rising a negative way
public concerns over health risks from electromagnetic by infrastructure
radiation.
sharing.
Morten Bæk
Both turned out to be key elements in the Over the years the local authorities responsible
shared use of infrastructure for mobile oper- for granting construction permits have engaged
ators. They proved to be useful tools to in close dialogue with the operators in order to
gain quick access to existing sites as well as find the most suited locations for new masts and
cost saving at a time when mobile networks towers. The aim is on the one hand to address
expanded at a high pace, to become denser, the need for better coverage, and on the other
and provide better coverage and more capacity. hand to minimize environmental impact. Strict
Especially with the introduction in 2010 of 4G Danish rules governing access to the rural open
on the Danish market where the demand for landscape and the preservation of the open
data began to grow with an annual increase of coastal line are, however, still among the main
60 % (see figure below). The first choice for the challenges for the operators in providing full
operators and for public authorities in Denmark coverage. This is true even though the societal
have been to reuse existing infrastructure rather need for a nationwide digital infrastructure is
than duplicating infrastructure. The telecoms well acknowledged. Since the entry into force of
operators have for their part on a voluntary basis the act in 1999, it has only once been necessary
agreed on both guidelines and standard con- for the public authority to enforce expropriation
tracts for the sharing of costs and facilities. This of property in order to ensure mobile coverage
has required a minimum of involvement from in an area.
the authorities.
Mobile data volumes, 2011–2017

Danish Energy Agency (DEA)
1000 TB
260
240
220
200 13
180
160
140
120
100
80
60
40
20
0
1. H. 2. H. 1. H. 2. H. 1. H. 2. H. 1. H. 2. H. 1. H. 2. H. 1. H. 2. H. 1. H.
2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017
In 2012 the Danish Competition Authority Or why have several competing mobile net-
granted permission for a network sharing works instead of one common? The answer is
agreement (Radio access network) between the simple. Without infrastructure competition there
Danish subsidiaries of Telia and Telenor. The will be no efficient competition. Capacity, speed
conditions were among others that they should and coverage are competitive parameters that
make redundant towers and sites available influence the choice of the consumers and give
to other market players. This network sharing the operators a clear incentive to invest in their
agreement between Telia and Telenor has led to networks.
substantial cost savings and a common network
with a better coverage and capacity than the Efficient competition requires both choice
two previously independent networks. between network operators and a surplus of
infrastructure on the demand side. Infrastructure
At the core of both the European and the sharing reduces costs but might also reduce
Danish regulation of the telecommunication consumer choice. So far the experience in
sector is the aim to ensure competition both Denmark has been increased coverage, prices
at the infrastructure and the service level. This have been reduced, and competition does not
includes a dilemma that can be phrased as a seem to have been affected in a negative way by
rhetoric question: what is the rationale behind infrastructure sharing.
having several parallel highways instead of one
common, cost effective one?
Lowest price for subscription of mobile broadband (3 Mbit/s / 384 kbit/s),

2009–2017, Danish Energy Agency (DEA)
Dkr.
300
250
14
200
156 156
150
104
99
100 77
66
59 49 49
50
0
2009 2010 2011 2012 2013 2014 2015 2016 2017
Ar
In the area of sharing underground infra- Infrastructure sharing can reduce infrastructure
structure, the Danish experience is less clear. costs to the benefit of both operators and cus-
Co-digging and coordination of cable works is tomers. So far the Danish experience has been
well accepted in the sector. The local authorities that both coverage has been increased, prices
and operators are to a large extent eager to have continued to fall, and investments in new
share the cost of deploying new cable infrastruc- infrastructure have been unaffected. There is no
ture. When it comes to sharing existing infra- indication that competition has been suffering.
structure, like tubes and ducts, the incentives In order to continue efficient competition, infra-
seem to be lacking. It appears that the operators structure competition is the key.
prefer to have full control over their cables and
are reluctant to lay cables in other operators’ A corner stone in the Danish regulatory
underground passive infrastructure such as approach is to ensure sufficient choice between
ducts and tubes. This is a surprise from the regu- network operators, and a surplus of capacity to
lators point of view. The general rule implies that choose from. With the expected future invest-
80% of the cost of deploying fibre optic cable ments in 5G, and the massive deployment of
is connected to the cost of digging in the urban antennas and small cells, the issues get new
areas and 50% in the rural areas. importance. This opens up the question of what
is the acceptable degree of network and infra-
In 2016 a legal obligation to provide access structure sharing? The potential cost savings
to existing passive infrastructure entered into can on the one hand speed up deployment and
force. So far the effects on the market players give Denmark a competitive advantage. On the
have been absent. No request for access has so other hand, in the longer perspective, it may
far handed in complaints to the Danish Energy hamper the sustainable competition between
Agency. This indicates that the rules have had network operators.
little, if any effect, so far.
15
GettyImages
India’s experience
in passive network
infrastructure sharing
R.S. Sharma
Chairman, Telecom Regulatory

Authority of India (TRAI), India
Our experience
in India suggests
ITU News asked Chairman R.S. Sharma about that passive
telecoms infrastructure sharing in India.
infrastructure 16
sharing enables
What made India leap ahead in 2007 to
become one of the first to allow passive
speedy growth
network infrastructure sharing? and rollout of
telecommunication
R.S. Sharma In 1994, the tele-density in India was a
meagre 0.89. In order to boost the growth of telecom- services, especially
munication services in the country, huge investments in developing
were required in the telecom sector.
countries.
R.S. Sharma
Equally critical were efficiency issues. With the To encourage passive infrastructure sharing
premise that opening up the sector attracts among licensed telecom service providers
investments, fuels efficiency, and in turn results on a mutual agreement basis.
in tele-density growth, the Indian telecom To bring in transparency, reasonability
sector was opened up to competition in 1994. and a well-defined time frame to facilitate
The results were fantastic. infrastructure sharing.
To lay down well-defined mechanisms to
After a tepid beginning, the telecommunication facilitate infrastructure sharing in critical
services sector, in the new millennium, entered areas (where possibility to erect towers
into a virtuous cycle of growth on the shoulders is limited).
of many initiatives taken by the Department of To facilitate active infrastructure sharing
Telecommunications (DoT) and the Telecom by modifying restrictive clauses in the
Regulatory Authority of India (TRAI). existing licence.
To develop a mechanism to provide financial
Recognizing the fact that the building of tele- support for the creation of infrastructure in
com infrastructure is highly capital intensive, rural and far-flung areas.
DoT permitted licensed telecom service pro- To encourage the use of non-conventional
viders to share passive infrastructure with other energy sources in areas where electric power
licensed telecom service providers. In the year supply is erratic.
2000, DoT introduced a new class of service
provider called the Infrastructure Provider In the afore-mentioned recommendations,
Category‑I (in short, IP‑I), who could provide TRAI specifically noted that “...mandating
passive infrastructure such as dark fibre, right of passive infrastructure sharing at this stage
way, duct space, towers, etc. to licensed tele- is not required.“ After receiving the TRAI’s
com service providers. However, the willingness Recommendations, DoT, in the year 2008,
of licensed telecom service providers to share formulated guidelines for the sharing of active
towers was initially low because they had appre- infrastructure, a simplification of frequency
hensions that the sharing of towers would result allocation procedures, and an enhancement in
in huge churn, as the other licensed telecom scope of the Universal Service Obligation (USO)
service providers would have almost the same
coverage area and quality of service (QoS). In
subsidy support scheme. After these guide-
lines came into force, the sharing of telecom
17
this background, the Government of India in the towers was keenly adopted by telecom service
year 2006 sought TRAI’s recommendations on providers.
ways to ensure the effective sharing of telecom
towers by the mobile service providers. After Many incumbent telecom service providers
a comprehensive consultation process, TRAI hived off their tower segments into separate
made its recommendations to the Government telecom infrastructure companies. In one case,
in the year 2007. a consortium of telecom service providers came
together to form a joint venture in infrastruc-
The following are salient features of ture sharing.
such recommendations:
What have been the benefits to The chart below depicts the growth in the tele-
the population in terms of higher communication subscriber base and the decline
connectivity and lower prices? of telecom tariffs from 2008 to 2017.
R.S. Sharma The policy and regulatory impetus Though there are numerous factors which led to
on passive network infrastructure sharing has the explosive growth of the telecommunication
made perceptible improvement in the pace services sector in the country, passive infrastruc-
of roll-out and delivery of telecommunication ture sharing played an important role in this
services in both urban as well as rural areas. It is growth.
estimated that the cost for space and energy is
reduced by about 20% for both telecom ser-
vice providers when a telecom service provider Do you have any lessons learned from
shares a tower with another telecom service the past ten years of infrastructure
provider. The telecom service providers appear sharing in India?
to have passed on the benefits of cost reduction
to the consumers as can be seen from the trend R.S. Sharma Our experience in India suggests
of decline in consumer tariffs. The falling tariffs that passive infrastructure sharing enables
have made telecommunication services more speedy growth and rollout of telecommunica-
affordable in India. Today, telecom services tion services, especially in developing countries.
are ubiquitous and are enjoyed not only in the It also brings down the capital cost and operat-
bustlling streets of a metropolis but also in the ing cost of networks. Governments and regula-
hinterland villages of the country. From a mobile tors need to be proactive in devising enabling
tele-density of 22.78 in March, 2008, the mobile frameworks for passive infrastructure sharing to
tele-density leapfrogged to 91.08 in March, boost the growth of the telecom sector.
2017. The average mobile tariffs for outgoing
voice calls declined from 0.92 per minute in
March, 2008 to 0.31 per minute in March, 2017
(At present 1 USD = 64.84).
18
1400 1.00
Wireless subscriber base (in millions)
1200
0.80
1000
800 0.60
600 0.40
400
0.20
200 Average tariff per outgoing minute (in Rs. per minute)
0 0.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
GettyImages
Supporting
infrastructure
sharing in Kuwait
Eng. Salim Muthib Al-Ozainah
Chairman and CEO, Communication

and Information Technology
Regulatory Authority (CITRA), Kuwait
Telecom 19
infrastructure
is a crucial part
ITU News asked Chairman and CEO,
Eng. Salim Muthib Al-Ozainah, about telecoms
of a digital
infrastructure sharing in Kuwait. economy.

Eng. Salim Muthib Al-Ozainah
What is the Kuwait telecoms by licensing companies that are specialized in

regulatory authority’s approach to mobile infrastructure sharing as a standalone
infrastructure sharing? business.
Eng. Salim Muthib Al-Ozainah Telecom infra- The sharing of mobile telecom Infrastructure
structure is a crucial part of a digital economy. is constantly evolving, motivated by financial
A robust telecom infrastructure can no longer and other incentives. With growing competitive
be restricted to voice and data communications. intensity, and lower prices, mobile operators are
It has become a vital part of the service delivery facing margin pressure, and need to systemati-
chains for a growing number of industries. Over- cally improve their cost position. Operators are
the-top services offered over telecom infrastruc- adopting multiple strategies, with infrastructure
ture are exceeding in value and are becoming sharing emerging as a mechanism to sub-
an indispensable part of the user experience. stantially and sustainably improve and reduce
network costs.
The challenge for operators and regulators is
to strike a delicate balance between promot- On the fixed network, CITRA is addressing
ing digital services, and ensuring that operator infrastructure sharing through interconnect
investments made in developing telecom infra- regulations that prevent operators from exploit-
structure is both profitable and sustainable. ing their dominant market positions. Although
mechanisms for sharing fixed network infrastruc-
The Kuwait Communication and Information ture are complex, CITRA believes that enabling
Technology Regulatory Authority (CITRA) views market structures that allow the transparent and
infrastructure as a utility, and the Internet as a efficient sharing of passive network infrastruc-
platform for the growth of a digital economy. ture will help build a robust and sustainable
Infrastructure sharing, in CITRA’s view, is one of fixed network service market, where everyone
the cornerstones for achieving this balance, and will benefit.
is taking a position that supports the sharing
of infrastructure, for both fixed and mobile
communication networks. CITRA’s mandate by What are some of the opportunities
law, includes allowing access to telecommuni-
cations facilities or services of another licensed
and challenges you see regarding
infrastructure sharing?
20
operator.
Eng. Salim Muthib Al-Ozainah Recent industry
CITRA’s approach is to support infrastructure trends show higher awareness and readiness
sharing by enabling conditions conducive to towards network sharing, also among opera-
voluntary, market-based sharing, through the tors seeking cost optimization and technology
introduction of positive incentives, such as refresh currently aiming at optimizing access
reduced license fees for mobile site licenses, transmission through sharing leased lines and
and encouraging mobile infrastructure sharing microwave links.
Kuwait has a developed mobile services market In addition to the passive infrastructure owned
that leads national penetration and coverage by the Ministry of Communications (MoC), other
indicators. CITRA believes that there is room for ministries and State enterprises reportedly own
the improvement of services and cost reduction. facilities that have excess capacity in ducts, fiber,
For example, proactively working with opera- towers and poles, which are not currently shared
tors to plan service rollout in new areas helps with operators. CITRA is working with other
to ensure that the underlying infrastructure government agencies to allow the operators to
required for backhauling traffic is either availa- make use of these assets, that can bring new
ble, or facilitated, through appropriate right of services to customers faster, and at lower costs
way and other permissions. and meanwhile, prevent further degradation to
the environment.
As any telecom regulator, CITRA’s main chal-
lenge is working with other State institutions
to promote its broadband agenda. CITRA is Has infrastructure sharing resulted in
working to develop a harmonized and holistic wider coverage?
approach across all distinct government actors,
to reflect infrastructure sharing as a component Eng. Salim Muthib Al-Ozainah Kuwait’s experi-
of a Kuwait’s broadband policy. ence in opening up the mobile communications
market is rather unique because of its flat terrain
CITRA is developing policies designed to and population concentration on a relatively
facilitate cross-sector infrastructure sharing to small area.
ensure that telecommunications operators have
access to existing and planned land corridors, Infrastructure sharing has not only resulted
established for other public or private purposes, in wider coverage, but has also allowed new
to ensure a telecommunications operator will be market entrants to reduce the time taken for
unhindered in its ability to build a new network, network rollout and service launch. Among
extend an existing network, or commercialize the three mobile operators working in Kuwait,
excess capacity on an existing internal utility shared mobile site infrastructure accounts for
network. nearly 30% of operator sites deployed. On the
Taking a holistic approach to telecom infrastruc-

fixed network side, 100% of the Internet service
providers use shared last mile access infrastruc-
21
ture will help offset development costs that are ture to deploy Internet services.
eventually passed on to end users. For example,
it is much more efficient and economical to The fixed network infrastructure is currently
ensure that telecommunications operators have owned and operated by the State-owned
access to corridors established or planned for Ministry of Communications. We are working

other purposes, such as plans for unitality con- towards a horizontal unbundling of State-owned
nectivity, than to require them to assemble their assets, with an urgent focus on the passive net-
own corridors. work, to be owned and operated by an operator
neutral independent entity.
Has infrastructure sharing led to

lower prices?
Eng. Salim Muthib Al-Ozainah Kuwait’s

telecom service prices are among the
lowest in the Arab States region. We
believe strongly that this is in part due to
the infrastructure sharing mechanisms
that are both regulated and market
driven. Mobile and Internet service prices
in Kuwait are also lower when compared
across the region. This is due, in part to
the sharing of infrastructure owned by
the Ministry of Communications, which
enables lower build costs for operators
or telecom services.
Are there any types of

infrastructure sharing that the
regulator will not allow? If
so, why?
Eng. Salim Muthib Al-Ozainah CITRA

will always encourage infrastructure
sharing agreements that benefit the
end users of telecom services, either by
reduction in pricing or by improvement
in service quality and efficiency. CITRA
will not allow any type of infrastructure
sharing agreement that either directly or
22
indirectly affects competition and access
to affordable telecom services.
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Infrastructure sharing and
network competition in
Spain — Regulating for
network competition
José María Marín Quemada
Three major
President, Spain’s National Authority for
Markets and Competition (CNMC)
agreements stand
out, involving
co‑investment
and infrastructure- 23
I
n as innovative a sector as telecommunications, sharing
competition between the networks of different
operators is the driver of effective investment and
commitments and
brings the user innovative, better-quality services, at the participation
competitive prices. We at Spain’s National Authority for

of four operators
Markets and Competition (CNMC: Comisión Nacional
de los Mercados y la Competencia) — responsible for in total.
multisectoral regulation, including the telecommunication José María Marín Quemada
sector, and for competition law enforcement — are
staunch advocates of this approach.
The regulation we apply — which in some cases Lastly, in 66 municipalities (35 % of the Spanish
imposes infrastructure sharing — eliminates bot- population) in which at least three operators are
tlenecks and provides operators with the rungs competing on next-generation networks, obli-
required to climb the investment ladder. Thus gations relate solely to access to copper wire
while deploying their networks, they are also and civil works, with no obligation regarding the
able to compete in services. fibre network.
Since 2009, Telefónica (the operator with signif- In mobile telephony, the investment obliga-
icant market power) has been under the obli- tions associated with licences for the use of
gation to give third parties access to its ducts spectrum boosted the development of four
and conduits (the MARCO offer). Likewise, we operators with their own networks offering
regulate symmetrically, obliging all operators to services on the national market. As from 2006,
provide access to vertical infrastructure within access obligations were also imposed on virtual
buildings where duplication would be senseless. mobile operators, and were withdrawn in 2017
In this way, operators have access to the civil once market-dynamization objectives had
works for the purpose of installing next-gen- been achieved.
eration networks, which can account for three
quarters of deployment costs.
Broad deployment of next-
The regulations regarding wholesale broad- generation networks
band markets were updated in early 2016, with
the adoption of an innovative approach. The The results of this model are extremely positive,
operator with significant market power is subject especially in regard to next-generation network
to obligations regarding the old copper-wire coverage, both mobile and fixed.
networks and new fibre networks, with differen-
tiated treatment for the latter depending on the In 2016, 94% of Spanish homes could, as a
competitive environment. minimum, access an operator’s mobile network
using 4G technology. Of even greater rele-
This means that for fibre, greater obligations vance is the indicator based on average mobile
are imposed on Telefónica in areas where there
is no effective competition in regard either to
operator coverage, which stands at around 86%
of homes and reflects considerable freedom
24
services or networks; a regional service is estab- of choice for users. Both figures are close to
lished for access to Telefónica’s fibre network European Union (EU) averages.
(regional NEBA (Nuevo servicio Ethernet de
Banda Ancha — new broadband Ethernet ser‑
vice)). In areas with competition in services but

limited network competition, virtual unbundled
local access is also enabled (local NEBA offer).
Fixed and mobile next-generation network coverage in 2016
Coverage rates (% of homes) Spain EU
Next-generation access (NGA) coverage 81% 76%
Fibre-to-the-property (FTTP) coverage 63% 24%
4G (LTE) coverage. Homes covered by at least one operator 94% 96%
4G (LTE) coverage. Operators average 86% 84%
Sources: Broadband Coverage in Europe. Study carried out for the European Commission by IHS Markit
and Point Topic and Europe’s Digital Progress Report (EDPR) 2017, European Commission Staff Working
Document, SWD(2017) 160 final.
On fixed networks, next-generation access Since 2012, in order to accelerate such deploy-
(NGA) coverage for homes in Spain stands at ment and reduce its costs, Spanish telecom
81%, which is above the European average operators have at their own initiative concluded
(76%). Most significantly, 63% of homes already infrastructure-sharing and co-investment agree-
have access to fibre optic networks, fundamen- ments, fundamentally for fibre optic networks.
tally fibre-to-the-home (FTTH), offering greater Three major agreements stand out, involving
services, as compared with 24% with access co-investment and infrastructure-sharing com-
to fibre-to-the-property (FTTP) networks at EU mitments and the participation of four operators
level, sometimes with lower quality features. in total. Each of the three agreements would
The four main operators present on the Spanish cover, respectively, 3 million, 6 million and 3 mil-
market are deploying FTTH networks, the trend lion building units.
being towards strong growth. This means a solid
wager is being placed on the development of
the digital society.
Implementation of the agreements — along with
other agreements concluded under market
25
conditions for the provision of wholesale access
services, including in areas designated as com-
Tackling the challenges of deployment petitive — will bring the percentage of Spanish
through sharing and co-investment homes with NGA coverage to over 95 % in 2020.
The regulatory model generates competitive

pressure that promotes the deployment of
next-generation networks.
Benefits and risks, a case-by- CNMC had the opportunity, as the compe-
case analysis tition authority, to take a decision on a com-
plex set of agreements between the first and
The benefits of infrastructure-sharing agree- fourth mobile telecommunication operators
ments are clear, particularly when, as in Spain, (S/0490/13). Those agreements, dating back to
they are accompanied by investment commit- 2013, included elements relating to infrastruc-
ments. The cost reductions and risk reductions ture sharing.
associated with innovative investments make
it possible — when the regulatory and compet- Without questioning the fact that some of
itive environment is right — for users to access those elements may generate efficiencies and
better-quality services at more competitive foster competition, the CNMC ruled that other
prices, sooner. elements — such as limitations on the resale of
certain wholesale services or certain provisions
But risks are also possible, deriving from the on roaming on 4G networks, which presup-
exchange of information between competitors posed the sharing of active components of the
sharing infrastructure, from reduced differ- networks and affected urban areas — constituted
entiation between their networks and from disproportionate restrictions on competition.
decreased competitive pressure, combined with
reduced idle capacity on the networks. There is To reach these conclusions, it was necessary to
an increased risk of collusion, and possibly less carry out an in-depth analysis of all the agree-
freedom of choice for consumers. ments, the competitive context, operators’ differ-
ent positions, and the regulatory framework. It
There is more likely to be a net benefit when all illustrates how difficult it is to determine in
the agreements relate to passive infrastruc- advance which agreements may ultimately not
tures (such as the ducts or placements) and are be admissible.
focused on rural areas. It is nevertheless the
CNMC’s understanding that the operators are Fortunately, as the regulatory authority responsi-
responsible for analysing the effects of their ble for telecommunications and for competition
agreements on competition and wellbeing, law enforcement, the CNMC is well placed to
taking into account the competitive and regula-
tory environment.
carry out these analyses. 26
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Independent towercos
inaugurate an era of
infrastructure sharing
Kieron Osmotherly
Towercos
now own 68.7%
Founder and CEO, TowerXchange of the world’s
investible towers 27
and rooftops.
I
Kieron Osmotherly
n a little over 20 years, a new breed of independent
telecom tower companies (towercos) have created a
new USD 300 billion infrastructure asset class — the
tower industry — which according to TowerXchange,

now owns 68.7% of the world’s 4.3 million investible
towers and rooftop sites.
Today, a tower on a mobile network operator’s While less than a third of the world’s towers
(MNO’s) balance sheet is a depreciating asset remain on MNO balance sheets, shown in blue
built to serve the needs of a single owner — the in the Figure below, only 15% of the world’s
same tower on a towerco’s balance sheet is a towers are owned by pureplay independent
potential source of long-term, recurring revenue towercos. 51% of the world’s towers are owned
from multiple credit worthy tenants. Investors by towercos that are themselves majority owned
recognize towercos’ proven long-term cash by MNOs, although that statistic is somewhat
flows, and the separation of infrastructure assets distorted by the sheer scale of China Tower
from retail and technology risk, hence a valua- Corporation and Indus Towers.
tion arbitrage wherein MNOs typically trade at
4-7x, while towercos typically trade at 10-25x.
While there is great diversity in towerco busi-

ness models, they can be categorized into two
groups. The first are pureplay independent tow-
ercos, exemplified by American Tower, Crown 33%
Castle, SBA Communications, Protelindo and
Cellnex, which can all trace their origins back to
the phenomenon where privately-owned tower 51%
builders started retaining and acquiring assets
in the U.S. in the mid 1990s.
1% 15%
The second category are operator-led towercos,
towercos in which 51% or more of the equity
is retained by parent MNOs, exemplified by
China Tower Corporation, Indus Towers, Bharti Operator-led towerco
Infratel, edotco and INWIT. A third variant on Pureplay independent towerco
the business model, which overlaps with both
Joint venture infraco
the pureplay independent and operator-led
categories, are the power-as-a-service towercos,
which provide a full service inclusive both tower
MNO-captive sites
28
and power, exemplified by IHS Towers, Helios
Towers and Eaton Towers.
Source: TowerXchange Research
Asia The “disarmament of MNOs passive infra-

structure” continues in India, where towercos
Just over 2 million of Asia’s 3 million towers are own more than two thirds of the country’s
owned or operated by towercos. 461 550 towers.
The Chinese market has transitioned to a Consolidation of the carrier landscape to four
co-build, co-share model, led by China Tower or five all-India players will lower the glass
Corporation (CTC), which remains 94% owned ceiling on towerco tenancy ratios, however, it
by China’s three MNOs, with an initial public will also concentrate spectrum in the hands of
offering (IPO) expected in the first half of 2018. carriers less burdened by debt and better able
In the two years since its creation in July 2015, to deploy capex, resulting in more sustainable
the infrastructure sharing facilitated by CTC has long-term growth for India’s towercos, even if
reduced China’s new cell site requirement by a they have to absorb a slowdown in near-term
staggering 568 000 sites, saving 27 700 acres of growth.
land, and CNY ¥100.3 billion (USD 15.2 billion).
Consolidation at the carrier level has acceler-
With an ecosystem of over 700 registered ated consolidation among India’s towercos, such
local suppliers to CTC, and with the Ministry that TowerXchange forecast two or three giant
of Industry and Information Technology (MIIT) Indian towercos emerging; American Tower,
and the State-owned Assets Supervision and plus a combined, increasingly privately owned
Administration Commission of the State Council Indus Towers/Bharti Infratel combine, with per-
(SASAC), both heavily involved in the transi- haps room for one other.
tion to independent infrastructure ownership,
the technical and regulatory environment is Two big questions remain in Indian towers:
extremely supportive in China, particularly since what will become of India’s towers that remain
document No. 92 legitimised the status of a on carrier balance sheets? While the Reliance
fragmented ecosystem of over 200 privately Communications towers will be acquired
owned, pureplay independent towercos that by Reliance Jio, the future of an estimated
also serve the Chinese tower market. 75 000 BSNL and MTNL towers, remains uncer-
The rest of North and Eastern Asia remains

tain. And with Vodafone and Idea making no
secret of their desire to monetize both their cap-
29
untapped by the tower industry — in countries tive towers, already lined up by American Tower,
like Japan, towers are still considered strategic and their stake in Indus Towers, TowerXchange
assets and a source of competitive differentia- wonder whether the Indian tower market is
tion. Oceania also remains relatively unpene- on the brink of evolving from an operator-led
trated, with only Axicom (formerly Crown Castle bias to a more pureplay independent towerco
Australia), and a handful of smaller private tower model. And if that were the case, will the current
builders active. contractual norms survive, where lease rates are
relatively low, amendment revenue is almost
non-existent, and discounts are offered when
towers are shared?
While the tower industry remains covetous of This region is also home to Asia’s most mature
aligning the Indian business model more closely benchmark tower market; Indonesia, where
with the pureplay independent towercos of the over 50 towercos own two thirds of the coun-
U.S., TowerXchange believes that downward try’s 93 549 towers.
pressure on ARPU and lease rates suggests
any transition in contractual norms may take
many years. Africa and the Middle East
While there remain operational challenges Five years ago, towercos owned less than 5%
particularly in rural India, towercos like Bharti of the towers in sub-Saharan Africa. Today, led
Infratel and Indus Towers have leveraged battery by Africa’s ’Big Four’ towercos (IHS Towers,
and renewable hybridization and free cooling American Tower, Helios Towers and Eaton
to enable over 80 000 towers to run zero-diesel. Towers), that figure has risen to over 36%. With
India is one of the most welcoming countries in many untouched African tower markets remain-
the world for towercos in terms of ease of doing ing uninvestible due to regulatory and taxation
business, with light touch registration of tower- regimes, the majority of Africa’s most investible
cos as IP‑1s, IP‑1s afforded infrastructure status towers have now been acquired — MTN and
since 2012, expedited rights of way since 2016, Airtel have divested towers in the majority of
and regulators actively promoting electromag- their larger markets, while Orange, Etisalat and
netic field (EMF) awareness, resulting in a tower Vodafone/Vodacom have partnered more selec-
count compound annual growth rate (CAGR) of tively with towercos.
3% forecast for the next three years, and aver-
age tenancy ratios approaching 2.5. The next milestone for the African tower indus-
try is likely to be the IPOs of three of the big
Regulatory environments are more varied across four towercos, with IHS Towers expected to list
the rest of Southern and Southeast Asia, with in New York, Helios Towers and Eaton Towers
mature regimes in Malaysia and Myanmar, and in London, seeking a collective valuation of
new licensing regimes emerging in countries around USD 14 billion.
like Bangladesh.
This region has seen towerco penetration

Africa’s ’Big Four’ towercos have successfully
evolved into full service powercos, assuming
30
rapidly rise to 34%, driven most recently by responsibility for and improving uptime at sites
the acquisitiveness of Asia’s two multi-coun- both on and off-grid, driving operational excel-
try towercos, edotco, which recently spent lence, and reducing pilferage and opex.
over USD 1 billion to acquire 13 700 towers
in Pakistan, and OCK Group, which recently

entered Myanmar and Vietnam.
While towercos currently own less than 1% of The Americas

the towers in the Middle East and North Africa
(MENA), this figure could rise to almost 10% USA and Canada remain the heartland of the
in the next year. Q417 saw the first sale and global tower industry; the business models and
leaseback of scale take place in the region; IHS contract structure utilized by American Tower,
Towers and Towershare announced the acquisi- Crown Castle and SBA Communications con-
tion of 1600 towers from Zain Kuwait. tinue to represent the ’gold standard’ in terms of
investibility and capital value creation, while the
Expect this to be the first of several MENA tower operational environment is less challenging than
transactions, where joint venture infracos may emerging markets, and the regulatory environ-
also emerge, with MCI, RighTel and Fanasia ment is considered extremely favourable.
pioneering this form of infrastructure sharing in
Iran. While historically value in the U.S. market has
been driven by robust contractual terms with
healthy lease rates and escalators, and signifi-
Europe cant ’amendment revenue’ (the overlay of nex-
tgen technology equipment), healthy domestic
Until recent adoption in MENA, the business lease up prospects have driven valuations to an
model of the joint venture infraco (infrastructure unprecedented high.
company) had hitherto been unique to Europe,
exemplified by CTIL and MBNL in the UK, as well With the majority of U.S. and Canadian towers
as 3GIS, SUNAB, Net4Mobility, Yhteis Verkko now on towerco balance sheets, leading U.S.
and TT Networks in Scandinavia. Joint ven- towercos have increasingly looked south of the
ture infracos own or operate 10% of Europe’s border to extend their growth narratives.
towers, but since 2012 Europe has seen signifi-
cant growth in both the pureplay independent When their latest acquisition closes in Paraguay,
towerco sector (driven by Cellnex and American American Tower will have almost as many
Tower) and the operator led towerco sectors towers in Central America/Latin America CALA
(with the carve outs of INWIT, Telxius); pure- (36 486) as they do in the USA (40 426). SBA
play independent towercos now own 12% of
Europe’s towers, operator-led towercos own
Communications has built a stronghold in
Central America, utilizing U.S. style contract
31
17%. structures in largely USD economies. SBA
recently supplemented their 7335 site Brazilian
While balance sheet re-engineering remains portfolio, acquiring Highline do Brazil and their
a driver in Europe, so does network efficiency 1200 sites.
— in particular the decommissioning of paral-

lel infrastructure.
About
This theme of towerco-on-towerco consolida- Kieron Osmotherly is the CEO of

tion will be a constant in 2018, with Phoenix TowerXchange (part of Euromoney
Tower International and Digital Bridge joining Institutional Investor PLC).
American Tower and SBA Communications TowerXchange is a community of
in seeking to rollup the dozens of smaller 35 000 tower industry leaders, which
private pureplay independent towercos in publishes the renowned TowerXchange
Latin America. Journal, and which organizes annual
Meetups for the top 250+ decision-
With the vast majority of towercos in Central and makers in the African, Latin American,
Latin America operated on a ’steel and grass’ Asian and European tower markets.
basis only (power remains the responsibility of
the carrier), the region benefits from relatively
low operational complexity, and the regulatory
environment is developing positively, with new
accelerated permitting initiatives bearing fruit in
countries like Guatemala, Mexico and Brazil. Improving operational and energy efficiency.
With an estimated 73% of North American and Standardization of site design and
51% of Central and Latin American towers now acceleration of rollouts.
on towerco balance sheets, the ’heartland’ of the
tower industry is almost sold out, driving inter- Ultimately, the separation of infrastructure assets
national growth of this proven innovation. from retail telecommunication releases capi-
tal and creates capital value, enabling MNOs
I’ll conclude by mentioning some of the positive to focus on selling minutes and megabytes.
impacts, and pitfalls to be avoided, as we con- It would be naïve to assume that this industry
tinue into an era of professional infrastructure transformation comes at no cost and without
sharing in which towercos own the majority of risk: MNOs would be well advised to absorb
the world’s towers. the cautionary tales of peers who leveraged
towerco partnerships to sell their passive
Towercos’ laser-beam focus on passive infra-
structure creates value in several ways:
infrastructure for many times its replacement
cost, in the process saddling the MNO’s local
32
operating companies with an increased total
Increasing tenancy ratios — driving tower cost of network ownership that may become
cash flow and reducing skyline clutter. difficult to sustain in the long term. Partnering
with towercos can relieve debt, but the old
Making more efficient use of land, cliché holds true: don’t take out a mortgage you
for example by decommissioning cannot afford!
parallel infrastructure.
Top towercos 2017

Tower count
Rank Towerco Countries Listed/private
Q417
1 China Tower 1 900 000 China IPO H118
Corporation
2 American Tower 149 720 Argentina, Brazil, Chile, Listed

Colombia, Costa Rica,
Germany, Ghana, India,
Mexico, Nigeria, Peru,
South Africa, Uganda,
USA, France
3 Indus Towers 122 920 India Private
4 Crown Castle 40 127 USA Listed
5 Bharti Infratel 39 211 India Listed
6 Deutsche Funkturm 34 700 Germany Private
7 edotco 31 600 Bangladesh, Cambodia, Private

Malaysia, Myanmar,
Pakistan, Sri Lanka
8 GTL Infrastructure 28 000 India Listed
9 SBA Communications 26 764 Argentina, Brazil, Listed

Canada, Chile,
Colombia, Costa Rica,
Ecuador, El Salvador,
Guatemala, Nicaragua,
Panama, Peru, USA
10 Cellnex 24 664 France, Italy, Listed

Netherlands, Spain, UK,
Switzerland
11 IHS Towers 23 382 Cameroon, Ivory Coast, IPO H118

Nigeria, Rwanda,
Zambia
12 Telxius 16 245 Brazil, Chile, Germany, Private

Peru, Spain, Argentina
13 Telesites 15 111 Costa Rica, Mexico Listed 33

14 Guodong 15 000 China Listed
15 Protelindo 14 614 Indonesia Listed
16 First Tower Coompany 14 000 Russia Private

17 Tower Bersama 13 175 Indonesia Listed
18 Mitratel 13 113 Indonesia Private
19 NetWorkS! 13 000 Poland Private
20 DIF 12 183 Thailand Listed
Source: TowerXchange
Shutterstock
Networks and
connectivity — Sharing
in order to improve
citizens’ lives
Tobias Martínez
The key
CEO, Cellnex Telecom
word in the
’geo‑economics’
of the digital
34
W
e have made the concept of digital economy is
transformation an integral part of our ’sharing’, not
mindset. Around the world, companies
are largely digital in that our decision-
’ownership’.
making is determined by the volume of data and Tobias Martínez
information which we access in real time, at all locations,

through mobile systems.
In this digital ecosystem based on the transmis- maintenance of aircraft engines, or enhance
sion of billions of zeros and ones, the networks welfare by carrying out remote monitoring of
that make this possible are just as important as patients. Such sensors are all based on per-
the information conveyed. I am referring to the manent and resilient connectivity, and it is
connectivity and integration of fixed and mobile estimated that there will 50 billion of them by
networks that make it possible to convey bits of 2020. The data they generate will facilitate deci-
information from one point to another, through sion-making based on “big data” applications.
whatever medium: cable, optical fibre, terres-
trial wireless networks, satellites, or perhaps all And we are still only in the initial stages of devel-
of these at some point, as networks become opment of an ecosystem which, with the advent
increasingly integrated and hybridized to form of 5G (IMT 2020), will undergo unprecedented
heterogeneous networks (“HetNets”) for relia- development: more, better, faster and more
ble communications. secure connectivity, with the capacity to handle
volumes of data that have never been seen
With this in mind, we need to create conditions before. The data associated with every con-
conducive to the emergence of an innovative nected person alone will grow four- or five-fold
and competitive ecosystem at the service of by 2020.
people. As the foundation of this ecosystem,
there is a manifest need for appropriate and
resilient infrastructure capable of handling the More data in a network that is broader,
data flows of today and tomorrow. denser, expanded… and shared
Some figures illustrate the trend. Some 25 years The inexorable growth in data traffic — in the
ago, before the advent of mobile connectiv- case of mobile communications, by an esti-
ity, buildings were connected to the fledgling mated 600% in the next five years — presents
Internet via fixed telephone networks. By 2017, us with a challenge: how do we make the
permanent access to the network wherever major investments that are needed to ensure
we happen to be had already become a basic secure and reliable transmission based on short
necessity: there are now more mobile voice technology cycles? This point is highlighted in a
and data contracts than there are people in the
world, and more smartphones than basic voice-
recent study by the consultancy firm EY. (“Digital
transformation 2020 and beyond: A global
35
only devices. telecommunications study” 2017)
But objects — in the “Internet of Things” or via As the study suggests, “Operators will need to
machine-to-machine communications — also consider new ways of generating capex effi-
interact among themselves. Nowadays we have ciency as they strive to meet growing demand
all manner of sensors that improve society for high-speed and low-latency data services.”
and enhance personal mobility. For example,
they can improve the efficiency of industrial There are a number of specific question which
processes (“Industry 4.0”) in the preventive we must be able to address.
How will we ensure that the enormous number necessary to establish and “share” the networks
of simultaneous access operations will allow the and infrastructure needed to accelerate the
speeds and latencies that are needed without introduction of new mobile broadband services
compromising security, for example, in autono- and applications. If we really wish to boost
mous vehicles? Are we going to densify net- competition among service providers (unleash-
works according to the principle of ownership ing innovation) and reduce the “time to market”
and deployment of networks by every voice and new products and services, entry costs must be
data access provider? Or will we opt for sharing cut to a minimum. Sharing also reduces CAPEX
a network that is necessarily broader, better pre- allocation to redundant (overlay) networks by
pared, and denser, comprising “small cells” or service providers (such as mobile network oper-
small antennas deployed and administered by ators), which releases available resources for the
infrastructure operators which make that capac- development of innovative broadband-based
ity available to the network access providers? content, services, applications, and so on, which
in turn stimulates digital transformation.
The need to harness models of network and
infrastructure sharing was also raised by the An adequate response will be possible only if
Chairman of GSMA, Sunil Bahrti Mittal, at the all the players — public administrations, network
Mobile World Congress 17 in Barcelona. In his access providers and infrastructure administra-
view, the current model, based on proprietary tors — act in a coordinated way. The densification
networks deployed by each operator, cannot of networks in response to the growth in data
be sustained, and companies that are purely traffic, and the need to ensure virtually universal
network and infrastructure operators (“Netcos”) coverage, will determine the criteria we apply in
should have a more important role — that is, planning and deploying equipment and infra-
companies which, independently of network structure, and it is reasonable to apply criteria
access providers, apply a model of value crea- that focus on efficiency and rationalization.
tion that maximizes the use of existing networks
and capacities to facilitate resource sharing and In an economy in which broadband connec-
thus help their clients (the network access pro- tivity will need to be taken for granted (like
viders) to be more competitive. access to mains water, electricity and gas), as
The key word in the “geo-economics” of the

well as being a factor for “social inclusion” and
overcoming the digital divide, competitive-
36
digital economy is “sharing”, not “ownership”. ness requires more rapid deployment of new
For example, in the future — and to some extent value-added services and applications. It is
even now — a car will no longer be just a car but essential to lower entry barriers by providing
rather, a software platform that will make real- incentives for the development of services and
time decisions based on dynamic information content that will boost competition, differentia-
gathered from the vehicle itself and its interac- tion and innovation, which in turn will enhance
tion with other external systems (other vehicles, citizens’ well-being.
GPS, and so on). For this to happen, it will be
Shutterstock
Five trends in shared mobile infrastructure
By Jennifer D. Bosavage
T
he number of mobile network small entrants (for whom rolling out a new net-
infrastructure sharing deals nearly work would be too costly) and more established
tripled between 2010 and 2015, players.
and has continued to rise since then.
Indeed, infrastructure sharing is here to stay, but Here are five trends in shared mobile infrastruc-
a number of trends will shape the market for ture that are impacting customers as well as
years to come. providers today — and in the very near future. 37
Mobile infrastructure sharing can help providers
lower costs. It can also help boost competition Trend 1: Expansion into rural or
and provide consumers with better options and underdeveloped areas
better prices as the demand for mobile ser-

vices increases. Despite government policies to encourage rural
connectivity, rural areas are still often under-
In a typical tower company (“Towerco”) deal, served by mobile providers due to small popu-
for example, a third party buys a tower from an lation numbers and lower revenue potential. But
operator, and then leases it back to the original when network providers sell off their towers, the
operator, as well as to others, including newer cost-benefit ratio becomes more attractive.
The operators leasing the tower can enjoy either now paving the way for others who are finding
reduced or no capital expenditure (capex) costs cost savings an attractive benefit.
associated with building the structures, tow-
er-capacity expansion and general maintenance. “The tower business is moving from emerging to
This helps operators to improve their profit developed countries. This is already happening
margins, and to invest in new technologies and in Italy − and given the revenue crunch across
improve network quality of service for the bene- Western Europe − it’s just a matter of time
fit of subscribers. before we see more and more service providers
selling their towers to a tower company special-
Mobile market expansion is global in nature, ist,” said Téral.
and the growth of mobile infrastructure is seen
as critical for emerging economies to gain
traction. Stéphane Téral, executive director of Trend 3: Reduction of emissions
research and analysis, mobile infrastructure and
carrier economics for research firm IHS Markit is Certain locations have imposed restrictions on
confident that real growth will be seen in devel- building in high-density areas. That’s partly the
oping nations. result of a desire to reduce emissions and also
a reaction to complaints that towers and their
“Nigeria is the most successful network shar- power generators are noisy polluters that are
ing country [in Africa]. Africa, India and Latin unattractive additions to the environment. Tower
America are three geographies where network sharing inevitably results in a reduction in the
sharing has been working well,” said Téral. number of towers required to service the needs
“Although India pioneered network outsourcing of network providers, while at the same time
back in 2005 and since has moved fast to net- minimizing the overall carbon footprint of the
work sharing and managed services, it’s EMEA telecom’s infrastructure. This applies especially
(Europe, Middle East and Africa) that is leading to emerging markets where towers are often
this area now with network sharing deals all powered by diesel generators due to unreliable
across Eastern Europe and Africa.” electrical grids.
Trend 2: Emerging countries lead

For example, commenting on Towershare’s
recent partnership with Telenor Pakistan, Irfan
38
by example Wahab Khan, CEO of Telenor Pakistan, noted
the importance of being environmentally
Improved cost efficiency has meant that, in friendly: “We believe shared mobile infrastruc-
some instances, less-developed countries have ture is a smart way to accelerate the spread of
embraced tower sharing before their industrial- telecom and digital services that will reap bene-
ized counterparts. Countries that have made use fits by conserving resources and staying friendly
of tower sharing out of financial necessity are to the environment.”
About
Jennifer D. Bosavage writes for IEEE

Trend 4: SDN market will benefit Global Spec. She is a New York-area
journalist specializing in technology
The telecommunication service provider seg- and business. Her work has appeared
ment is expected to be the fastest-growing end in Information Week, CRN, and
user for the software-defined networking (SDN) VARBusiness, as well as a number of
and network function virtualization (NFV) mar‑ tech-focused blogs.
ket. That market is predicted to explode from
USD 3.68 billion in 2017 to USD 54.41 billion
by 2022.
SDN has been proposed as a key component in

the design of future 5G wireless networks − pro-
viding the communication between applications
Trend 5: NFV will also be a winner
and services in the cloud. The network can be
SDN is not a prerequisite for NFV, but the two
managed based on real-time needs and status
sets of technology together augment each
dynamically. SDN makes it easier for tower own-
other’s capabilities. The technology replaces
ers to introduce and deploy new applications
dedicated network appliances, including routers
and services than it is using hardware-depend-
and firewalls, with software running on servers.
ent standards.
The software is dynamically implemented on the
network, transforming it without requiring the
installation of new equipment.
According to Téral, NFV will provide the next

wave of operational efficiencies in network
sharing. “By moving more and more network
functions from hardware to software by using
off-the-shelf IT components and platforms, the
cost of network nodes goes down and new
services can be turned up and down at a power
39
of a click,” he said. “Overall, with the concept of
network slicing, it will become easier to share
networks among several service providers.”
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Sharing networks, driving growth

More and more companies are sharing the networks in order to

The increase in telecoms infrastructure sharing has allowed for a

(Editorial) Cover photo: Shutterstock

1 Sharing networks, driving growth

(Infrastructure sharing for development)

CEO, MainOne Editor-in-Chief: Matthew Clark

12 Balancing infrastructure sharing — The Danish experience

R.S. Sharma including maps, do not imply the expression of any

All photos are by ITU unless specified otherwise.

23 Infrastructure sharing and network competition in Spain

(Towercos — a growing market)

34 Networks and connectivity — Sharing in order to improve

(Identifying future trends)

in brief The sharing of non-electronic infrastructure

Several key And some potential risks

• Increased tax revenues for • Disputes.

Source: SADC ICT and Broadcasting Infrastructure Sharing Guidelines

Your guidelines for ICT and broadcasting

Policies and Plans

Licensing Regime Regulatory Mandate

The ITU’s World

Still, it remains astounding that Africa still has such low

bandwidth penetration levels. With 29% Internet pene-

The continent is already host to numerous

President, ANATEL, Brazil

RAN sharing has

In Brazil, a country of continental proportions, it is

Infrastructure-sharing policies that increasing the value of the business, optimizing

The Brazilian Federal Government, represented

competition in the sector, thus favouring the

public database on antennas was established in 2004,

Mobile data volumes, 2011–2017

Lowest price for subscription of mobile broadband (3 Mbit/s / 384 kbit/s),

Chairman, Telecom Regulatory

Chairman and CEO, Communication

infrastructure sharing in Kuwait. economy.

What is the Kuwait telecoms by licensing companies that are specialized in

Taking a holistic approach to telecom infrastruc-

access to corridors established or planned for Ministry of Communications. We are working

Has infrastructure sharing led to

Eng. Salim Muthib Al-Ozainah Kuwait’s

Are there any types of

Eng. Salim Muthib Al-Ozainah CITRA

competitive prices. We at Spain’s National Authority for

vice)). In areas with competition in services but

Fixed and mobile next-generation network coverage in 2016

Coverage rates (% of homes) Spain EU

Next-generation access (NGA) coverage 81% 76%

Fibre-to-the-property (FTTP) coverage 63% 24%

4G (LTE) coverage. Homes covered by at least one operator 94% 96%

4G (LTE) coverage. Operators average 86% 84%

The regulatory model generates competitive

tower industry — which according to TowerXchange,

While there is great diversity in towerco busi-

Asia The “disarmament of MNOs passive infra-

The rest of North and Eastern Asia remains