New structures and models will lead to new businesses
By Keith Dyer, Editor, Mobile Europe
Vodafone and Orange have given a glimpse into the future structure of mobile operators’ networks and business models by announcing that they plan to combine and share their UK radio access networks.
Already committed to sharing their 3G networks in Spain, the companies have said they plan to combine their existing 3G networks in the UK, as well as share on new build. They will also look at sharing on 2G “as technical solutions become available.”
It will take “a number of years” to combine the two networks, the operators said in a joint statement. The companies are attracted by being able to reduce the number of mast and base stations they would need to roll out.
Margaret Rice-Jones, ceo of Aircom, which has just launched a range of products aimed at making it easier for operators to plan and manage shared networks, said that shared networks will become increasingly common as operators face changing business models and regulatory pressure.
“There are several things happening that will result in changes to the way the industry is structured at present,” she said. “One driver is the regulatory requirement operators are facing to meet the terms of their 3G licences in terms of coverage. But equally important is that due to competition and regulation, operators are facing great pressure on the price they can get per minute and per MB. In some cases, their unit costs for network traffic are now starting to be more than the price they can sell for, and this is a relatively new thing for them to be facing up to,” Rice-Jones said.
Rice-Jones sees a number of future models maturing over the coming years, but she is convinced that the operation and management of the network will become separated from the content and service provision, billing and marketing functions.
“Instead of seeking to differentiate themselves on coverage, operators will differentiate on content and services, with a shared network resource, rather like the power distribution networks, independently managed underneath.”
Rice-Jones did point out that certain operators, perhaps those looking at quad play services, may be able to create their own economies of scale from a different perspective.
Shared networks mean operators need to be able to cooperate on co-location, as well as on antenna configuration and modeling of resources, as well as being able to deliver multiple views of a single network.
This change in the way networks are planned and managed will lead eventually to a new breed of company, providing independent, end to end, network operations and management expertise, on an outsourced basis, Rice-Jones said.