A group of wireless carriers currently serving more than 550 million customers announced plans for a network sharing initiative targeting the Middle East and Africa. The partnership is designed to speed the delivery of mobile broadband services in those regions.
The initial partners include Bharti Airtel, Etisalat Group, MTN Group, Ooredoo Group, Orange, STC Group, Vodafone Group and Zain Group. Those operators combined control 79 networks across 47 countries.
Details on the network plans or potential markets to be covered have yet to be released, but industry trade group GSMA noted the move needs support from individual regulatory bodies in allowing for “flexible commercial sharing arrangements and facilitate access to government-owned assets at preferential rates to help speed up the roll-out of new networks and support the business case to extend mobile networks into rural areas.”
“This cooperation demonstrates that the industry is committed to innovating in order to serve the billions living in the rural areas,” said Manoj Kohli, managing director of Bharti Enterprises and chair of the Public Policy Committee of the GSMA board. “We call on governments to support and encourage the commercial infrastructure sharing arrangements that we aim to propose.”
Network sharing has always been a contentious issue in the mobile space as agreements between rivals to share infrastructure has typically run counter to competitive business models. Arthur D. Little recently released a report, “Network cooperation: Making it work and creating value,” finding that while such arrangements are on the rise, there are substantial hurdles that need to be overcome for such agreements to see the light of day.
“In a given market, realistically, only a few network-sharing configurations can be successful, given the dynamics between the market leader and smaller operators, the role of the network in gaining market advantage and regulatory considerations,” the report noted. “Even after obtaining alignment on the key strategic and financial principles of a network-sharing venture, misalignment on operational aspects during implementation can jeopardize the deal.”
Glen Peres, manager at Arthur D. Little’s Telecommunications, Information, Media and Electronics practice and co-author of the report, explained that a key component for such deals to be completed is to have the right leadership within the organizations taking charge.
“These deals most often happen when the CEO is the one leading the initiative,” Peres explained. “They are the ones who typically get the right balance.”
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