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David Williams
Global Director of Sales, Research
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RAN Sharing: Cutting the Cost of Mobile Broadband
Mobile operators across the industry are engaged in cost-reduction initiatives targeting every part of the mobile network, from the price of base station equipment to the cost of backhaul. And now a new option has opened up that has the potential to fundamentally alter the cost structure of the mobile industry: radio access network (RAN) sharing.

RAN sharing is about taking the costliest pieces of an operator's network the cell sites and towers, base station equipment, and the transmission network and sharing this infrastructure with competitors. The idea is that, by reducing duplication of network assets, operators can deliver better services for less money.

This will require a huge shift in strategic thinking on the part of mobile operators that have historically emphasized network coverage and reliability as key marketing points. Yet there is no other initiative that could deliver such vast financial benefits without compromising customer-facing services. With potential savings of up to 30 percent on overall network costs, mobile operators worldwide are exploring RAN sharing as a means of restructuring their cost bases and relieving the industry-wide pressure on profitability.

This report explores the economic drivers for RAN sharing and examines how it could lead to a more horizontal industry structure, in which consolidated access networks are operated (and perhaps owned) by specialist independent network operating companies. It includes analysis of high-profile RAN sharing agreements between major global operators and evaluates the impact this trend could have on equipment providers and network outsourcers.
Sample research data from the report is shown in the excerpts below:
Table of Contents (uni0507_toc.pdf)
The following figure provides a rough estimate of the impact RAN sharing could have on an operator's cost base. It is based on the assumption that around 30 percent of combined opex and capex is spent directly on the network (excluding interconnect fees), and that 80 percent of the cost of a network is in the RAN.
[click on the image above for the full excerpt]
The table below summarizes the various models for RAN sharing, with examples of implementations and estimates of the potential savings.
[click on the image above for the full excerpt]
Companies mentioned in this report include: 3G Infrastructure Services AB; 3gis Properties (No 2) Pty Ltd.; Alcatel-Lucent (NYSE: ALU); AT&T Inc. (NYSE: T); Bharti Airtel Ltd. (BSE: BHARTIARTL); Ericsson AB (Nasdaq: ERIC); Hi3G Access AB; Huawei Technologies Co. Ltd.; Hutchison Telecommunications (Australia) Ltd., a subsidiary of Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY); Motorola Inc. (NYSE: MOT); Nokia Siemens Networks B.V.; O2 plc, the wireless unit of BT Group (NYSE: BT; London: BTA); Orange S.A., a subsidiary of France Telecom (NYSE: FTE); SingTel Optus Pty. Ltd., a subsidiary of Singapore Telecommunications Limited (Pink Sheets: SGTJY); Sprint Wireless (NYSE: PCS); Telenor ASA (Nasdaq: TELN); Telstra Corp. (Pink Sheets: TLSYY); T-Mobile International AG & Co. KG, a subsidiary of Deutsche Telekom (NYSE: DT); Verizon Wireless; Vodafone Group plc (NYSE: VOD); and ZTE Corp. (Hong Kong: 763)
Total pages: 21
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