Network sharing - the US$8bn question

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Operators across the Middle East and Africa could save up to US$8 billion in capital and operational expenditure in the next five years, according to a recent study by Delta Partners. The firm estimates that there are around 200,000 towers in operation in the region and that operators invest between 10% and 20% of their revenues in them each year. In addition, a further 100,000 towers are predicted to be rolled out in the next five years.

 

 

Network sharing is not a recent trend, but the current economic environment, increasing competition and pressure on margins across MEA markets, is making operators consider it in order to achieve significant savings in capex and opex," Victor Font, managing partner at Delta Partners, toldArabianBusiness.com. "In some case, infrastructure sharing is the only viable way to access rural areas and penetrate lower end segments."

 

Delta forecasts that several tower sharing deals will be announced in the coming twelve to eighteen months and these could potentially involve some of the large pan-regional operators. The concept isn't new and recent multi-billion dollar sharing deals have been concluded in India and last month's announcement that Vodafone and Telefonica are to share parts of their European network infrastructure further bolsters the case.

 

In the fixed line communications market, UAE operator du is also championing the sharing concept and has gone on record to state that it thinks competition in the broadband internet market will only emerge when telcos can share each others' networks.

Stewart Baines

I've been writing about technology for nearly 20 years, including editing industry magazines Connect and Communications International. In 2002 I co-founded Futurity Media with Anthony Plewes. My focus in Futurity Media is in emerging technologies, social media and future gazing. As a graduate of philosophy & science, I have studied futurology & foresight to the post-grad level.