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GSM today: the beauty of network sharing

February 2, 2004

Besides the potential cost savings, there is much to be gained from network sharing. Not only can it reach new subscribers, existing customers also get better coverage.

GSM now offers further improved functionality for network sharing, reducing investment costs for increasing GSM coverage and WCDMA network construction.

 

Telecom infrastructure sharing is not a new concept. The first submerged trans-Atlantic cable was completed in 1858, and this was an early example of beneficial industry cooperation based on the drive to share investment costs and create additional revenue by increasing the market.

 

As for 21st-century mobile systems, the ability to re-use GSM equipment when building WCDMA networks was what first triggered the development of more advanced network-sharing functionality, says Ulrik Wahlberg, Business Solution Manager at Ericsson.

 

"Many GSM operators are still expanding their GSM coverage, which has prompted Ericsson to develop solutions for GSM-only infrastructure sharing as well," he says.

 

Consequently, the latest GSM system release offers improved functionality for network sharing, along with three different models with varying degrees of cooperation between operators, ranging from simple site sharing - which is not a new idea - to the common usage of core and radio networks.

 

Share more - save more
Martin Ottosson, Business Solution Manager at Ericsson, says operator demand is driving this development: "The trend is towards sharing only the radio network, while today's solution also includes the core network, which is more complex from a technical point of view and requires more sophisticated business models. Still, the conclusion is that the more you share, the more you save."

 

Network-sharing agreements may produce CAPEX savings of 20-40%, while OPEX savings fall within the same range. Wahlberg says: "Ericsson can offer suitable business models based on our experience of all different types of sharing solutions."

 

But there is more than potential cost savings and reduced financial risks behind network sharing. Reaching out to new subscribers as well as offering better coverage to existing ones is another important motive.

 

Ottosson says: "Network sharing makes it possible to reach sparsely populated rural areas where new subscribers can contribute to new revenues.

 

Increased coverage increases traffic and ARPU
In addition, existing subscribers can use the service in new locations, and therefore may make more calls. Increased coverage almost invariably leads to more traffic and higher average revenue per user (ARPU)."

 

For incumbent operators, network sharing is a way to trim CAPEX, while for new operators it reduces the costs of network expansion. Alternatively, second and third operators in a particular market may join forces and share networks to compete more effectively with the incumbent.

 

Ottosson points out that there are possibilities for operators wishing to outsource the operation and management of a shared network to a third party: "Ericsson Global Services provides complete operation and maintenance packages to a number of operators," he says.

 

(In this context, a common shared network means the sharing of a complete network: radio and core, but not the service network).

 

Sharing solutions
The sharing solutions now possible for GSM functionality are:

  • Site sharing - all passive parts of a site are shared
  • Geographically split network - in essence, an agreement for national roaming
  • Common shared network - the sharing of a complete network
In the near future, shared BSS - the sharing of a radio network, but with individual frequencies - will also be possible with Ericsson GSM.

 

Ericsson GSM offers functionality that supports two types of common network sharing: with or without support for Multiple Public Land Mobile Networks (PLMN). The former is unique to Ericsson, says Ottosson.

 

He explains the difference: "Support for Multiple PLMNs is a solution in which two operators share nodes yet maintain their respective identities as far as the end users are concerned. In simple terms, it means sharing physical as well as logical network dimensions, whereas the solution without Multiple PLMN support is about physical sharing only."

 

Looking ahead, new areas ripe for potential network sharing and improved coverage - even in highly mature GSM markets - include, for example, in-building solutions.