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Senior executives of telecom operators could be putting the future of their organisations at risk by delaying decisions on sharing the building, upgrade and maintenance of their networks with their peers and giving away upto 20% of margin in the process. In a report released on Thursday by J.Berkeley Group, the growing practice of Network Sharing is slated to become an essential means of addressing growing costs of network operations and upgrades, rather than a fashionable choice for operators.
“The sheer volume of Capital and Operating Expenditure that is needed to enable LTE and 4G enablement of mobile networks across the world is so high that it will eat away operators’ budgets and adversely impact their focus on business and service,” said the report entitled Network Sharing Will be Make-or-Break for Operator Futures. “Operators who have not learned lessons from 2G and 3G build experiences will duplicate spending on LTE and 4G and this will rob vital new service innovation from getting adequate attention and budgets.”
The world over, Customer Experience, not technology and operations, is being acknowledged as the key Unique Selling Proposition that operators can build for their businesses. Network Sharing is seen as one of the key enablers that will bring together national budgets for rollout and empower CXOs to focus on service-based differentiation.
“Customers buy services, not your Infrastructure. Failure to focus on service and Customer Experience and cutting network costs through sharing will risk margins to the tune of about 20% or more for 3G and 4G networks these are the savings expected
from Network Sharing.”
Further, operators are vastly underestimating the bandwidth that will be consumed by hungry, Overthe-top (OTT) services from non-telecom companies. According to the report, more than 90% of Internet traffic will be video by 2014 and mobile networks and devices will be the major bearers of this usage.
“This means that CTOs of operators will need to revisit their network plans and budgets very quickly in order to keep pace with the OTT avalanche that could choke their networks. Network Sharing will be one of the few available avenues to efficiently deal with current demands as well as plan for sustaining profit margins in future,” the report states.
The report from JBG also emphasises the role of regulators in managing the move to shared networks. “There is policy change as well as mindset change needed to smoothen the road to sharing – and regulators will need to step up to the challenge of this role,” it says. Already, regulators in China, the UAE and other countries are actively working with local operators to execute changes to regulation of shared, rather than owned, networks. The policy changes needed as well as the impact on margins and profitability will be discussed in detail in this new report that will be made available to JBG’s operator clients over the coming four weeks.
Christian Luginbuhl, head of network performance in France Telecom (FT), Europe believes that total cost per site can be cut by 20 percent to 40 percent depending on the depth of the sharing (as told to Bloomberg). France Telecom said it’s teaming up with Deutsche Telekom again, through T-Mobile in Poland, to share networks and prepare them for an upgrade to a fourth-generation network. In France itself, FT shares mobile sites in rural areas with SFR, a Vivendi SA unit, and with Bouygues SA.
Joachim Horn, chief technology officer of Tele2 AB claims that by sharing networks, operators can lower operating expenses by between 30 percent and 35 percent.3. Tele and Telenor have signed a deal to share their 2G, 3G and 4G networks -the first deal of its kind.
Malaysian operator Axiata expects to save about $719 million over 10 years from the sharing of its network infrastructure deal with DiGi. Vodafone UK claims to see savings worth US$1.45 billion a year from its network sharing agreement with Orange.T-Mobile and 3UK announced a network sharing agreement which they hope will generate cost savings of £2 billion over the next ten years.
_http://www.telecomtiger.com/Corporate_fullstory.aspx?storyid=15564&flag=1&passfrom=topstory§ion=S162
“The sheer volume of Capital and Operating Expenditure that is needed to enable LTE and 4G enablement of mobile networks across the world is so high that it will eat away operators’ budgets and adversely impact their focus on business and service,” said the report entitled Network Sharing Will be Make-or-Break for Operator Futures. “Operators who have not learned lessons from 2G and 3G build experiences will duplicate spending on LTE and 4G and this will rob vital new service innovation from getting adequate attention and budgets.”
The world over, Customer Experience, not technology and operations, is being acknowledged as the key Unique Selling Proposition that operators can build for their businesses. Network Sharing is seen as one of the key enablers that will bring together national budgets for rollout and empower CXOs to focus on service-based differentiation.
“Customers buy services, not your Infrastructure. Failure to focus on service and Customer Experience and cutting network costs through sharing will risk margins to the tune of about 20% or more for 3G and 4G networks these are the savings expected
from Network Sharing.”
Further, operators are vastly underestimating the bandwidth that will be consumed by hungry, Overthe-top (OTT) services from non-telecom companies. According to the report, more than 90% of Internet traffic will be video by 2014 and mobile networks and devices will be the major bearers of this usage.
“This means that CTOs of operators will need to revisit their network plans and budgets very quickly in order to keep pace with the OTT avalanche that could choke their networks. Network Sharing will be one of the few available avenues to efficiently deal with current demands as well as plan for sustaining profit margins in future,” the report states.
The report from JBG also emphasises the role of regulators in managing the move to shared networks. “There is policy change as well as mindset change needed to smoothen the road to sharing – and regulators will need to step up to the challenge of this role,” it says. Already, regulators in China, the UAE and other countries are actively working with local operators to execute changes to regulation of shared, rather than owned, networks. The policy changes needed as well as the impact on margins and profitability will be discussed in detail in this new report that will be made available to JBG’s operator clients over the coming four weeks.
Christian Luginbuhl, head of network performance in France Telecom (FT), Europe believes that total cost per site can be cut by 20 percent to 40 percent depending on the depth of the sharing (as told to Bloomberg). France Telecom said it’s teaming up with Deutsche Telekom again, through T-Mobile in Poland, to share networks and prepare them for an upgrade to a fourth-generation network. In France itself, FT shares mobile sites in rural areas with SFR, a Vivendi SA unit, and with Bouygues SA.
Joachim Horn, chief technology officer of Tele2 AB claims that by sharing networks, operators can lower operating expenses by between 30 percent and 35 percent.3. Tele and Telenor have signed a deal to share their 2G, 3G and 4G networks -the first deal of its kind.
Malaysian operator Axiata expects to save about $719 million over 10 years from the sharing of its network infrastructure deal with DiGi. Vodafone UK claims to see savings worth US$1.45 billion a year from its network sharing agreement with Orange.T-Mobile and 3UK announced a network sharing agreement which they hope will generate cost savings of £2 billion over the next ten years.
_http://www.telecomtiger.com/Corporate_fullstory.aspx?storyid=15564&flag=1&passfrom=topstory§ion=S162
