The UK experience illustrates how network sharing can evolve over time and how different forms of sharing can coexist. Site sharing, for example, has been present in the UK since the first mobile networks were launched in the 1980s. Coverage was seen as a competitive differentiator; therefore, mobile network operators (MNOs) were reluctant to make their sites, seen as strategic assets, available to their competitors. However, in some cases, sites were shared on a reciprocal basis, that is, each operator provided access to a small number of its sites in return for access to the same number of competitor sites.

As the third and fourth MNOs rolled out their networks in the UK, few sites were made available to them for sharing because the incumbents considered their coverage advantage to have too great a strategic value. However, as all the networks matured, reciprocal arrangements became common across all MNOs. Prior to the award of 3G licences in the UK, the regulator secured a voluntary undertaking to provide national roaming to support the entry of a fifth MNO, and in 2003, Hutchison 3G UK (“Three”) launched its 3G service, with its own network in urban areas underpinned by na­tio­nal roaming on Orange’s 2G network. This national roaming arrangement has subsequently been re­negotiated but remains in place at present.

In 2007, Three and T-Mobile (now Everything Everywhere [EE]) announced plans for 3G radio access network (RAN) sharing through a joint venture (JV), MBNL. In the same year, Vodafone and Orange announced plans for RAN sharing of both 2G and 3G networks. Although the Vodafone and Orange deal was not completed, this, along with the setting up of MBNL, heightened interest among MNOs for greater network sharing.

There are now two mobile network sharing arrangements in the UK: Corner­stone covering arrangements between Vodafone and Telefonica-O2, and MBNL covering arrangements between EE and Hutchison 3G-UK.

The Cornerstone arrangement comprises two main elements:

  • RAN sharing: The sharing of active network components to establish a single RAN.
  • Passive sharing: Consolidation of the existing sites and passive infrastructure of the two operators into a JV company.

The active sharing element of Cornerstone was announced in July 2012 and it represents an evolution of the previous passive sharing arrangements of the two parties. Under Cornerstone, the UK (excluding London) is divided into east and west zones while London is divided into north and south zones. Within each territory, one operator is the “host”, owning and operating the single RAN that is used by both companies. The parties cooperate in each territory under the terms of a managed network services ag­ree­ment. London is treated as a special case to be split only for 4G. The arrangements also establish a joint transmission network, consolidating traffic over a reduced number of sites to achieve economies of scale in backhaul capacity.

The passive assets (existing sites and passive infrastructure) are consolidated into a JV company that owns and manages all the sites of both operators, nationally and in accordance with the single grid of base stations across the UK to serve the combined needs of both the operators as efficiently as possible. This is essentially the extension of the existing Cornerstone agreement.

MBNL was initially set up as a JV between T-Mobile and Three in October 2007. It was responsible for consolidating two separate 3G RANs of T-Mobile and Three to deliver and consequently manage a combined 3G network for both operators. After the merger to form EE, the merged company replaced T-Mobile in the MBNL JV and MBNL’s role extended to consolidating Orange’s 3G cells in the combined 3G RAN.

In contrast to the sharing agreement between O2 and Vodafone, Three and EE share nationally passive infrastructure, active 3G base station equipment (NodeBs), backhaul transmission and radio network controllers. Three and EE maintain separate backbone and core network infrastructures, while each operator uses its own spectrum allocation. EE and Three have subsequently updated their arrangements for 4G to share site masts and backhaul transmission, but the two companies will not share active 4G equipment. The two operators will maintain their separate core networks. s

Based on the OECD paper,“Wireless Market Structures and Network Sharing”, 2014