mobile network sharing : facilitating deployment of mobile broadband

© Cullen International SA 2017

Veronica Bocarova – Cullen International

EaPeReg Workshop on Broadband Development

Chisinau – April 6-7, 2017

Mobile network sharing:

facilitating deployment of mobile broadband


infrastructure sharing

national roamingcases & regulatory

approaches introduction


Infrastructure sharing and national roaming

• host MNO willing to increase network usage (under-utilised network)

• mutual roaming or network sharing to complement coverage

Commercial agreement

• symmetrical, applies to all operators

• policy goals: efficient use of resources, coverage, environment, emergency services

Law

implementation of policy goal: newmarket entry, coverage and rollout(roaming and/or network sharing provisions)

Licence

• telecom: SMP obligations on market 15/2003 (roaming)

• antitrust: remedy in M&As or restrictive agreements

Remedy

Legal basis


Infrastructure sharing

http://img27.fansshare.com/pic15/w/the-pushbike-song/369/15938_vintage_tandem_bike.jpg


Passive infrastructure sharing

Source: Vodafone

Sites and masts


• MORAN (Multi Operator Radio Access Network) – dedicated frequiencies

• MOCN (Multi Operator Core Network) – shared (pooled) frequiencies

Active infrastructure sharing Radio access network (with/without spectrum)

Source: Vodafone


Why infrastructure sharing?

Source: Vodafone

Passive: 10-15% in

both CapEx and OpEx

RAN: 25-40% in CapEx

20-30% in OpEx

Cost savings


Why infrastructure sharing?Other considerations

• To facilitate rollout and expand coverage into underserved rural areas. Less likely to occur on commercial basis in the markets where coverage is seen as key differentiator

• To increase coverage and provide additional capacity in densely populated urban areas where it is difficult to acquire new sites

• Investments into independent infrastructure companies (tower business) has become popular in some countries –either owned by third parties or jointly owned by MNOs


National roaming


National roaming

• An agreement among operators to use each other’s networks to provide services in geographic areas where they have no coverage (possible even within the licensed areas)

• Occurs between MNOs (usually direct competitors) in the same country

• Operators do not share any network elements as such but use each other’s network to provide services to their customers

• Enables a mobile subscriber to automatically make and receive voice calls, send and receive data, or access other services when travelling outside the coverage area of the home network, by using a visited network


Why national roaming?

• To enable a new entrant offering a national service within a limited period while it is still rolling out its own national network

• To ensure national coverage in case of fragmented regional licences

• To facilitate coverage of rural or remote areas

• To ensure uninterrupted network access in emergency situations

http://gigaom.com/broadband/verizon-lte-outage-reliable/no-phone-service/


Why national roaming?

New entrant

network not (yet) national coverage

2G

3G

3G

4G

2G

2G/3G

3G

2G/3G

roam on

roam on

roam on

roam on

complement

fall back

complement

fall back

Facilitating market entry


EU regulatory approach

Focus on passive sharing

NRAs shall “be able to impose the sharing of facilities or

property, including buildings, entries to buildings, building

wiring, masts, antennae, towers and other supporting

constructions, ducts, conduits, manholes, cabinets”

Article 12(1) Framework Directive 2002/21/EC


In Germany and the UK

First, and so far only, completed assessment by the European

Commission under Article 101 TFEU

2003

Passive site sharing and national roaming,

(possibly extending to RAN in Germany)



2003

Sharing of basic network infrastructure only (such as

masts, power supply, racking and cooling)

Does not restrict competition under art. 101.1

TFEU


Passive sharing


EU regulatory approachNational roaming – European Commission

• Coverage, roll-out, prices and

quality of service

• Especially in urban areas where

good opportunities for the rollout

of competitive networks

Does restrict

competition by

effect

• Promotes market entry, better

and quicker 3G services and

increasing retail competition

• Differentiated between urban

and rural areas

• Exemption for a start-up period

until O2 had set up its own

network in Germany

Can be temporary

exempted under

art. 101.3 TFEU

2003


EU regulatory approachNational roaming – EU General Court

• Commission’s analysis of the effect of

national roaming agreement on

competition flawed

• No restriction of competition

O2 appealed

• Commission had not properly assessed the

extent to which the agreement was necessary

for O2 to enter the market (the counterfactual)

• Dependence of O2 on T-Mobile designed to be

temporary

• May actually increase competition by letting a

small MNO compete with a large one

EU General Court

agreed

2006


Towards active sharing

Country MNOs What is shared?

AT, BE All Antennae and repeaters in tunnels and metro

FR Free Mobile & Orange 3G RAN sharing, 3G/2G and 3G/3G roaming in small towns and rural areas

Bouygues & SFR 2G/3G/4G RAN in rural areas (57% population)

CZ O2 & T-Mobile 2G/3G/4G RAN (ex. Prague and Brno)

GR Vodafone & Wind Hellas 2G/3G RAN

ES Orange & Vodafone 3G RAN in small towns and rural areas

PL T-Mobile & Orange 2G/3G RAN

RO RCS&RDS & Vodafone 4G RAN + national roaming

Orange & Telekom Romania 4G RAN + national roaming

UK EE & H3G 3G RAN

Vodafone & O2 2G/3G/4G RAN

RAN only


Towards active sharing

Country MNOs What is shared?

DK Telia & Telenor 2G/3G/4G RAN + 800MHz/1800MHz

FI DNA & Telia 2G/3G/4G RAN + 800MHz blocks (50% territory)

HU Telenor & Magyar Telekom

4G RAN + 800 MHz lease (ex. Budapest)

SE Telia & Tele2 3G RAN + 2GHz spectrum

Telenor & Hi3G 3G RAN

Telenor & Tele2 2G/4G RAN + 800MHz/900MHz/1800MHz/2.6GHz

PL T-Mobile & Orange 4G RAN + 900/1800 MHz lease

RAN + spectrum


SUNAB JV approved by the NCA in March 2002

Nr 1 and 2 (out of 4 MNOs) in the retail market

Telia left without UMTS licence in 2002

2002

3G RAN sharing with spectrum pooling

Towards active sharingRAN + spectrum

50% 50%


Net4Mobility JV approved by the NCA in September 2010


Joint spectrum in 800 MHz, 900 MHz, 1800 MHz and 2.6 GHz

2010

2G/4G RAN sharing with spectrum pooling


50% 50%


Covers the whole Danish territory;

Joint spectrum ownership in 800 MHz and 1800 MHz bands


Nr 3 and 1 (out of 3 MNOs) in the wholesale market

2012

RAN sharing with 4G spectrum pooling



Will not share the intelligent part of the (core) network where

services and customer data are defined

Joint venture in Eastern and Northern Finland covering 50% of

territory and 15% of population

Combine 800MHz frequency blocks to offer faster 4G

connections and more capacity to their customers in the area

Nr 2 and 3 (out of 3) in the retail market

2015

RAN sharing with spectrum pooling

Facilitating rural coverageRAN + spectrum


Facilitating rural coverage

• 2006: the French government launches ‘programme zone blanche’ to facilitate 2G coverage in rural areas where operators had no coverage

• Coverage of 99% of the French population by the end of 2007, covering more than 3,000 rural communities - either through site sharing or roaming

• National roaming stands for coverage of 1.2% of the population

• 2010: the French MNOs commit to share network infrastructure to enhance 3G coverage in rural areas by 2013

• 2015: white areas still affect 0.1 % population for 2G and 1% for 3G, and cover 1.5 % territory –to be covered by end 2016 (2G) and mid-2017 (3G)

• Requirement to notify network sharing agreements to ARCEP

2006

Rural coverage: from 2G to 3G


Target area – densely populated• Passive site sharing: OK• Active RAN sharing with spectrum pooling: “strong

reservations”• Other active RAN sharing: information exchange “must be

controlled and in any case limited”

Target area – sparsely populated• Any type of sharing is not prohibited a priori• But spectrum pooling to be examined “very carefully”

• Market power needs to be assessed

2013

Network sharing

GUIDELINES


“The NCA should pay particular attention … to duration.

Close supervision and monitoring of these agreements

are necessary, since it is not necessarily in the interest of

either the guest or the host operator to terminate a

national roaming agreement”

2013

National roaming

GUIDELINES


French NRA implements these principles in own guidelines 2016 (NRA)

ARCEP requested mobile network operators to

align their agreements to its guidelines by June 15,

2016

Since August 2015, ARCEP has the power to

amend network sharing agreements and also

has jurisdiction over dispute resolution


Phase-out of national roaming by 2022

Action taken by the MNOs after ARCEP’s guidance

2016 (NRA)


What’s next?EC telecom framework review proposals

• When attaching conditions to individual rights of use for radio

spectrum, competent authorities may authorise the sharing of

passive or active infrastructure, or of radio spectrum, as well as

commercial roaming access agreements, or the joint roll-out of

infrastructures for the provision of services or networks which rely on

the use of radio spectrum, in particular with a view to ensuring effective

and efficient use of radio spectrum or promoting coverage.

• Conditions attached to the rights of use shall not prevent the sharing

of radio spectrum. Implementation by undertakings of conditions

attached pursuant to this paragraph shall remain subject to competition

law.

Article 47(2) draft Electronic Communications Code

© Cullen International SA 201730 © Cullen International SA 2013

Infrastructure sharing and roamingSummary

• Regulated access to infrastructure sharing and roaming is used as a tool to support infrastructure based competition

• Regulators tend to encourage or even mandate national roaming at early stages of network roll-out or in rural areas

• However roaming is usually not seen as a long-term solution: typically does not count towards roll-out obligations and allowed for a limited time period and/or with a limited geographic scope

© Cullen International SA 201731 © Cullen International SA 2013

Infrastructure sharing and roamingSummary

• Infrastructure sharing is usually commercially driven rather than imposed by regulators

• Passive infrastructure sharing is encouraged and permitted, or sometimes even mandated: environmental and efficiency benefits and limited competition impact

• Active RAN sharing is permitted as long as MNOs maintain separate logical networks and the impact on network competition is assessed to be neutral

• Competition rules apply to national roaming agreementsand RAN sharing with pooled spectrum


[email protected]

mobile network sharing : facilitating deployment of mobile broadband

Presentations & Public Speaking