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Mobile infra sharing to grow more popular in India

02 Sep 2010
00:00
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Originally adopted as a method to increase the speed of network rollout, infrastructure sharing is today central to the strategies of mobile operators in India. Although the concept was initially pioneered by infrastructure companies set up as offshoots of mobile operators, the entry of independent infrastructure players has resulted in a balanced industry structure. A combination of factors, such as the launch of 3G and BWA services, and the need to enhance in-building coverage, will ensure that network sharing remains strong during the next 3–5 years.

With the slowing pace of network expansion by most operators, the current demand for network sharing is primarily coming from incumbent operators, which are looking to address capacity constraints in their 2G networks, and from newer operators that are investing to extend their mobile network coverage in existing service areas. The recently concluded auctions for 3G and BWA spectrum in India are expected to give further fillip to demand for passive infrastructure space, because:

The spectrum auctioned by the government for 3G and BWA is in the 2100MHz and 2300MHz spectrum bands, respectively. Operators will need more cell sites to serve customers in the existing coverage area compared to 2G (900MHz and 1800MHz).

The BWA auction has thrown up multiple new players in the market, including Infotel, Augere, Qualcomm, and Tikona, which do not have an existing cellular network. This has led to a requirement for new passive infrastructure space for telecoms equipment.

In terms of cost, the two key prevailing pricing models of standard pricing and structured pricing are expected to prevail in the short term. Standard pricing, which is based on standard site configuration, is preferred by the newer mobile operators since in most cases they do not have large legacy passive infrastructure already serving the network. Structured pricing, which allows mobile operators to pick and choose individual components that they wish to share, is preferred by incumbent operators, which either have legacy passive infrastructure or intend to leverage cheaper procurement agreements with individual component vendors.

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