Analyzing the Economic Effects of Past Mobile Network Sharing Deals for Future Network Deployment

Abstract

The increase in data traffic calls for investment in mobile networks; however, the saturating revenue of mobile broadband and increasing capital expenditure are discouraging mobile operators from investing in next-generation mobile networks. Mobile network sharing is a viable solution for operators and regulators to resolve this dilemma. This research uses a difference-in-differences analysis of 33 operators (including 11 control operators) to empirically evaluate the cost reduction effect of mobile network sharing. The results indicate a reduction in overall operating expenditure and short-term capital expenditure by national roaming. This finding implies that future technology and standards development should focus on flexible network operation and maintenance, energy efficiency, and maximizing economies of scale in radio access networks. Furthermore, mobile network sharing will become more viable and relevant in a 5G network deployment as spectrum bands are likely to increase the total cost of ownership of mobile networks and technical enablers will facilitate network sharing.

A multi-attribute model to optimize the price and composition of prepaid mobile Internet plans

“…Conjoint analysis methods and DCEs have been applied in a broad array of disciplines like healthcare (Strauss et al , 2018), food industry (Meyerding et al , 2019; Chamhuri and Batt, 2013) and tourism industry (Kim et al , 2018b). Examples of utilization of conjoint analysis can also be found in the telecommunication industry extensively (Confraria et al , 2017; Kim et al , 2018a; Sobolewski and Kopczewski, 2017; Srinuan et al , 2012; Dagli and Jenkins, 2016).…”

The Impact of Shared Telecom Infrastructure on Digital Connectivity and Inclusion

“…As reported by the literature, shared telecom infrastructure can generate cost savings for MNOs, ranging from 20 to 30 percent (Kim et al, 2018;Amadasun et al, 2020). These wholesale cost savings in the upstream of the mobile connectivity value chain can benefit end-users by (i) increasing the intensity of competition in downstream markets, and (ii) being passed through to end-users in terms of reduced price, depending on the intensity of competition.…”

“…Arakpogun et al (2020) investigated barriers to infrastructure sharing in seven SSA countries based on interviews with different stakeholders and found that incumbents might be reluctant to share networks as this would erode their competitive advantage, and many markets have been dominated by one or two MNOs for years, which lack institutional incentives to engage in infrastructure sharing. Mamushiane et al (2018) quantified the economic impact of infrastructure sharing using Software Defined Networking (SDN) and estimated that in the case of South Africa, full implementation of sharing can reduce the time to recover CAPEX investments and reach profitability from 5.4 months to less than 1.3 months in rural areas, suggesting profitable operation even less economically attractive zones.Other studies have focused on the benefits of shared infrastructure for mobile network operators Kim et al (2018). assessed the impact of infrastructure sharing deals on firm performance using a DiD methodology and find statistically significant reductions OPEX for national roaming by 14% in the short run and by 19% in the long run Amadasun et al (2020).…”

Cost assessment of multi-tenancy for a 5G broadband network in a dense urban area

“…Different types of network sharing with 2G, 3G and 4G infrastructure have been used in a few countries. In the case of 4G, a few technical and administrative options to share mobile network infrastructure have been described in GSMA (2012) and WIK-Consult (2016), and the cost impact of mobile sharing schemes is explained in Mölleryd et al (2014); Khan (2011); and Kim et al (2018). In this paper, we refer to the ability to serve multiple service providers from a shared infrastructure enabling multi-tenancy.…”