Telecom infrastructure sharing may spur gear sharing too, experts say

The telecom regulator‘s proposal on giving separate authorisation for telecom infrastructure sharing without the need to pay separate licence fee could spur operators to share active equipment such as radio access network, antennas/ transceivers, base stations, backhaul networks and controllers, experts said.Telecom firms have been sharing passive infrastructure such as buildings, telecom towers, dark fibers and duct spaces, with the country emerging as one of the pioneers in infrastructure sharing, according to industry body Cellular Operators Authority of India (COAI).

However, this is not the case for active operational infrastructure except for a few projects.

“This is largely because for active equipment sharing, the licence fee for both operators would double, and therefore, does not make a business case despite the cost savings promise,” said Prashant Singhal, TMT emerging markets leader at EY Global.

The current scenario could change with Telecom Regulatory Authority of India (Trai) recommending creating a separate category under the unified license for Digital Connectivity Infrastructure Provider (DCIP) authorisation.

“…the proposed DCIP authorisation holder may create both active and passive digital connectivity infrastructure and share it with other TSPs and has to pay no license fee to the government,” Trai said in its recommendations last month.According to BEREC, a global body of European telecom regulators, active infrastructure sharing, excluding spectrum, could bring 33-35% savings in capital expenditure and 25-33% in operating expenses, more than the 16-35% savings from passive infrastructure sharing.In India, for instance, a shared Radio Access Network (RAN) deployment by RailTel and CloudExtel at nine railway stations in Mumbai brought savings of 50-60% for Bharti Airtel and Vodafone Idea, according to CloudExtel.

“It has also increased download speeds by 10-15x and even improved customer experience in surrounding macro sites by 16x for Airtel and VIL ,” said Kunal Bajaj, founder and CEO of CloudExtel.

“With usage surging 24% to 24.1GB monthly in 2023 (Nokia report), 5G’s arrival only intensifies the pressure. Existing RAN deployment can’t keep pace – 5G’s shorter waves require a denser network of micro cells, more than double what 4G demanded,” he added.

“A lot of it depends on practicality and how differently operator networks have evolved. For instance, VIL has lot of dependency on 2G, whereas Airtel and Jio’s 5G stacks are quite different,” said Singhal.