Sharing of mobile networks for mobile operators discouraged

Local mobile phone service providers should not share their network infrastructure as this discourages competition, the GSM Association has advised.

In a report dubbed GSMA Wholesale Open Access Network, the association argues the implementation of a single wholesale network is a recipe for slow progress on network coverage.

“We have found that network competition produces faster and more extensive network coverage, and the examples highlighted in the report indicate little evidence that a SWN/WOAN is likely to achieve this,” GSMA chief regulatory officer John Giusti said. He added that a move to wholesale networks will harm consumers since history has demonstrated that network monopolies normally result in high prices and lower investment in infrastructure.

The findings come on the back of a back and forth effort to open network infrastructure sharing in the country due to a complicated negotiation process with a number of stakeholders including the Communications Authority of Kenya.

The regulator, through its director general Francis Wangusi, has been pushing for the implementation of the agenda since March last year to offer small operators access to the limited resources at lower prices.

According to initial plans, the government would provide a spectrum and private companies would roll out and operate the wholesale network.

The regulator had suggested that an LTE consortium should cover 98 percent of the population. “Some supporters claim that these networks will deliver greater coverage than market competition can. However, those making this claim often gloss over the fact that in order to be built, the SWN or WOAN require significant public subsidies and other forms of support which are typically not available to competing network operators,” the report states.

According to this report, only Rwanda, out of the five countries that originally considered implementing network infrastructure sharing, has rolled out a network. The five countries include Kenya, Russia, Rwanda, Mexico and South Africa.

The association has instead urged the government to support the ability of mobile operators to enter into infrastructure sharing agreements on a voluntary basis.

This includes application of market-friendly spectrum assignment methods to maximise coverage using appropriate spectrum license conditions that will extend mobile services to less connected areas.

As per the study, Rwanda, despite implementing the plan, is still unlikely to achieve coverage, price and competition goals. As of July 2016, the country’s LTE-based network was available in 25 out of 30 districts with population coverage estimated at around 30 percent which is way below the original coverage target of 95 percent to be achieved by the end of 2017.

In Russia, the initiative failed completely since carriers were not able to reach an agreement and went their own way on LTE, after reportedly insisting on choosing their own vendors. This is despite the country’s telco Scartel being allocated 40 MHz of spectrum in the 2.6 GHz band and given the first license to offer LTE services.

South Africa has renewed it’s plans to go further than other countries have dared by using all spectrum bands. However if the plan fail, the country’s economy will be negatively impacted, according to the report.

Mexico’s plan to implement the agenda has oftenly been delayed since 2014. Last year, the Altán consortium won a bid from the government to build the Wholesale LTE network.

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