Infrastructure sharing in the telecom sector has become imperative in order to accelerate network rollout, reduce costs for telecom operators and provide better quality of service to end-users. The government has taken some initiatives in this direction and the Telecom Regulatory Authority of India (TRAI) has recently released its recommendations on infrastructure sharing which have been welcomed by the industry. TRAI has recommended, among other things, that sharing should not be made mandatory and should be left to the operators’ discretion. It has also suggested that a list of sites that may be shared be put up on the website.
Given the importance of infrastructure sharing, tele.net invited industry experts to share their views on the subject at a conference, “Infrastructure Sharing in Telecom: Strategies and Opportunities”. We bring you some excerpts…
Bharat Bhatia, Regional Director, India, SAARC and South Asia, Motorola Government Relations Office Countries should share active infrastructure including resources such as spectrum and numbers. Sharing of spectrum is possible and has been done in many countries.
At the other extreme is the mobile virtual network operator (MVNO) concept where the main, or one of the main mobile operators, has the complete network and another company rides on it. That company gets a fixed set of phone numbers and sells its own service, thereby becoming the MVNO. In Singapore, Virgin is offering mobile services as an MVNO using SingTel’s infrastructure.
Looking at the maturity of the Indian market today, there is no reason why India should not adopt the concepts of facilitiesbased operations (FBOs), and servicesbased operators (SBOs), and permit additional SBOs to draw upon existing networks and offer services to the customer.
Shantanu Consul, Administrator, USO Fund Infrastructure sharing is going to play a crucial role in sector growth. In many ways, telecom infrastructure is most crucial because this is one sector that will have a direct impact on development in other infrastructure sectors.
In India, there are 700 million people in rural and remote areas, spread across 600,000 villages. Factors like widely dispersed villages, difficult topography, lack of infrastructure, irregular power supply and low income levels have an implication for telecom companies as they go into the rural areas to take up the challenge of providing connectivity. While some of these factors will result in higher capex and opex, others will play a crucial role in the determination of ARPUs. It is in recognition of these factors that the Universal Service Obligation (USO) Fund, which was set up to take telecommunications to the rural areas, identified the need to go mobile in these areas.
Bidding has recently been concluded for 7,871 government-identified sites that are to be shared by at least three service providers. The political will to extend telecom facilities in the rural areas is thus clearly visible.
Infrastructure sharing brings specialisation to the fore. It has given rise to an entity called the infrastructure provider who specialises in locating the land, putting up the tower, getting the electrical connection, ensuring security and maintaining fuel supply. If all these activities become the responsibility of the infrastructure provider, it allows the telecom service provider to concentrate on areas like technology and marketing. The initiatives taken by the government include amendment of the Indian Telegraph Act in order to enable the USO Fund to provide support for mobile services. Following the amendment, recognition was given to infrastructure providers to participate in the bidding process for access to the USO Fund, and about 21 of them have been shortlisted. A few months ago, the government launched the Mobile Operators’ Shared Tower Project (MOST) in the urban areas. It has since made good progress.
Discussions are currently on among the infrastructure providers, operators and the government to get requisite sites in Lutyens’ Delhi and other areas where military and defence establishments have an important say. DoT will play a prominent role in this. Over time, this initiative will not only succeed but will become the pattern that will be followed for the deployment of infrastructure in the urban areas.
The Indian Telegraph Rules have also been amended to enable the USO Fund to undertake more diverse activities. Of these, the most important is providing assistance for improvement of general infrastructure in the rural areas. This is another area that could operate on a shared basis. The USO Fund is categorical that it will not support, financially or otherwise, infrastructure that is not shared.
The government now intends to improve the scheme for sharing infrastructure and is in constant dialogue with service providers and infrastructure providers for this purpose. The government has also looked at the possibility of sharing antennas, but is not convinced due to certain technical constraints, particularly the doubts regarding the possibility of having an antenna that can serve both CDMA and GSM services.
TRAI’s recommendations are being studied by DoT. According to the government, licence conditions will not hinder sharing. However, spectrum sharing has been ruled out for the time being.
The government will go in for the second phase of shared infrastructure for mobile services within the next three to four months. This would be in addition to the 7,871 towers. The time-frame for completing this phase will hopefully be reduced. Moreover, the government’s scheme for taking broadband to the rural areas will be announced shortly, and with that the need for sharing OFC or for laying a new OFC network will become even more important. In the near future, with cooperation from the infrastructure providers and service providers as well as support from the government, a positive outcome is clearly visible.
A.K. Gupta, Senior Deputy Director-General, Civil, BSNL BSNL has had a legacy network and there is always a problem attached with sharing legacy. Recently, however, commercial considerations have unlocked the potential of sharing. The recent USO tender created an environmental change as each individual operator was virtually forced to make some complicated calculations as to how the commercial regimes would set in during the first five years of subsidy, and thereafter.
BSNL was aggressive in its bids for both Part A and Part B of the USO Fund infrastructure sharing tender. While it had already planned to roll out networks in most of the areas that had been defined in the tender, the rollout was being done in a phased manner and was taking time. But the process has become faster with the advent of this tender, which generated a high level of interest among the operators.
The company is, in a way, sharing most of the infrastructure at relatively low costs today. Points of presence have been given to operators for their connectivity on national and international levels.
But too much emphasis on sharing the last mile has put national connectivity sharing on the backburner. In fact, had it been the other way round with more emphasis on national connectivity and backhaul, BSNL would have got revenues for both its legacy network and the effort it put into building such a large infrastructure. The USO attempt will have far-reaching consequences as operators would be forced to share their backhaul and long distance connectivity.
As far as last mile sharing is concerned, BSNL would not like to share its last mile connectivity so easily because commercial considerations need to be put into proper perspective before the company can take up any issues related to this.
GIS mapping is another important aspect. Once mapping takes place through the efforts of BSNL, DoT and other operators, more proposals may emerge by taking a closer look at the physical locations on the GIS plans.
As metro cities reach their plateaus, the shift is naturally towards tier 2 or tier 3 cities and thereafter tier 4 villages. Clearly, the future potential lies in the villages.
S.C. Khanna, Secretary General, AUSPI Infrastructure sharing reduces the cost involved in infrastructure creation, optimally utilises the scarce national resources, improves environmental aesthetics and enables better quality of service depending on the extent of sharing. It also allows a higher number of operators to provide services and be profitable, thereby stimulating competition.
However, the problem of non-availability of sites in congested areas reduces coverage, and this is a common phenomenon.
There is a need to optimise utilisation of these sites in order to get better coverage.
In order to step up infrastructure sharing, the government should provide concessions in the form of reduced taxes, free spectrum for a limited period, availability of land at concessional rates, subsidised electricity, etc. The government can help service providers by making available to them sites in many congested areas. It can also help service providers to get right of way for digging, ducting, procurement of land, and similar activities.
According to AUSPI, effective backhaul sharing and subsidy support for the same would go a long way in making infrastructure sharing more effective.
V.S. Rawat, Senior Vice-President, Bharti Infratel Bharti has always been in the forefront as far as infrastructure sharing is concerned.
The first formal infrastructure-sharing agreement was signed in late 2001 between Bharti and Escotel, which is now part of Idea. In fact, Bharti has signed agreements with almost all the operators since then.
TRAI’s recommendation which allows infrastructure providers to obtain Standing Advisory Committee for Frequency Association clearance on behalf of the operators, and the listing of critical sites on the websites helps operators to roll out networks and supports transparency.
One very welcome move is the formation of the joint working group to clear critical sites in areas like Lutyens’ zone, cantonments, etc. While TRAI has not recommended spectrum sharing and intracircle roaming yet, sooner or later these would also come under the scope of infrastructure sharing and Bharti would welcome the move since these add to improved utilisation of resources and proBidding has recently been concluded for 7,871 governmentidentified sites that are to be shared by at least three service providers. The political will to extend telecom facilities in the rural areas is clearly visible.
Shantanu Consul vide better customer services.
Today, Bharti has approximately 10,000 sites which are shared with one operator or the other, which forms about 27 per cent of our total sites. But the company aims to increase this number.
Initially, when the company started rolling out networks, the infrastructure laid out on the ground was the bare minimum for cost optimisation. Now it is a challenge to make those sites shareable with two or more operators. The area of the site may be too small or the towers at the site may not support the antennas of multiple operators. Sometimes the building structures may not be strong enough and then of course, there may be issues with landlords who may not permit another operator to enter, or who might quote such high rates that would make sharing not viable.
Another big hindrance has been the perceived conflict of business interests of operators, but with maturity coming in, hopefully this is being addressed. And lastly, while most private operators have now entered into infrastructure sharing, public sector operators BSNL and MTNL are yet to enter the fray.
Infrastructure sharing is slowly gaining momentum. Almost all the operators today are engaged in very serious discussions on how to enhance the current pace of infrastructure sharing. Second, there is a higher degree of transparency with the operators being open to sharing their complete deployment plans, both present as well as future.
Some tower companies have also come up, giving a big fillip to infrastructure sharing because a tower company always comes with a site which is shareable. Their intention is to maximise sharing and there is no perceived conflict of business interests. The operators can focus on the network.
Now it is up to the operators to take it forward, and since BSNL and MTNL have also now taken a decision to move in that direction, infrastructure sharing will soon be taken up in a big way.
With the industry growing rapidly, Airtel had established about 40,000 sites by the end of last year, and has targeted another 30,000 sites in the current year.
These sites are being hived off into a new infrastructure company and will be available for all operators to share.
Wherever the sites are not shareable, Bharti will try and make them so, or relocate to areas where it will be possible to have a site which can be shared among three, four or even six operators. Very soon there will be five to six operators sharing a site in every circle. Every site will have five to six operators in the next two years. Bharti is taking this initiative and it will support infrastructure sharing to a great extent.
Anil Tandan, CTO, Idea Cellular At present, there is a fair amount of sharing, at least among the three or four major operators: Idea, Bharti, Hutch and even the Tatas to some extent. Idea Cellular is currently sharing roughly about 46 per cent of its sites, either as guests in somebody else’s network, or as hosts to some other operator. In some circles, the sharing percentage is as high as over 90 per cent.
Bilateral sharing translates directly into the need for it at a local level. So while there is a higher degree of sharing in some circles, issues like first-mover advantage, competitiveness, etc. have restricted sharing of all sites in other circles.
Savings in both capex and opex is the one key advantage of infrastructure sharing, with savings in opex being more important as this affects the EBITDA, which every company is looking to improve.
Project MOST, which was launched in March 2006, has not really taken off since cooperation from other ministries including the Ministry of Environment and Forests, and the Ministry of Urban Development is required. Clearly, DoT would have to impress upon these ministries the importance of infrastructure sharing to ensure their cooperation. The identification of critical sites and formation of a joint working group will help. As a step in this direction, the government has recently created vigilance cells in each circle. DoT officials in these cells can also act as representatives to quick-start project MOST.
As far as sharing of active infrastructure is concerned, sharing of antennas and feeders is possible, though it would not be possible to share nodes and the radio access networks in the absence of spectrum sharing. Sharing backhaul infrastructure is also possible in active sharing, and was allowed even during the earlier licence conditions.
Another option that can be considered for rural connectivity is using non-conventional energy sources. Idea is partnering with the GSM Association and Ericsson towards working on alternative fuels, biofuels being one of the possibilities. L “BSNL would not like to share its last mile connectivity so easily because commercial considerations need to be put into proper perspective before the company can take up any issues related to this.”
A.K. Gupta
