India is a relatively late entrant in the mobile services bastion. The positive ramification of this incident is the significant reduction in the network cost that India has enjoyed, as compared to the other countries that has forayed into mobile services much earlier. The fact that the capital cost of providing fixed line service is about four times more than the capital cost of providing mobile service, is both heartening and encouraging for the mobile industry. The operators are open to ideas that would reduce the operational costs still further. And Mobile infrastructure Sharing is a concept that just might turn out to be the much needed respite. In Mobile Infrastructure Sharing, the operators share the network components of third-party which results in low initial investment.

Infrastructure sharing can be roughly categorised into active sharing and passive sharing. The passive sharing of network infrastructure involves sharing of tower mast, cables, physical sites, power supply, air-conditioners, alarm systems etc. The active sharing of network infrastructure involves sharing of antennas, backhaul transmission systems and importantly, the base station equipments. Active sharing is said to give an additional cost benefit of 40 percent on top of the passive sharing of infrastructure. This means a significant reduction in the operational costs to the operators.

In India, the growth of network sharing is expected to be driven by increased rural penetration, current capacity constraints and increased costs of rolling out services like 3G. This growth is placed at somewhere around 20 percent on a five-year basis for the country. It is profitable for the operators because they can roll out the networks faster and cheaper, as compared to spending time as well as resource on self-expansion. This is also advantageous for rural expansion, which is the main area of focus for most of the operators as the urban areas gain saturation. The available resource usage is also optimised while promising affordability and sustained competition. Furthermore, tax exemption benefits are also being mulled over by the government to make the concept of sharing more attractive.

In more than 60 percent of the geographical area of India, commercial viability of competitive and individual mobile infrastructures remains doubtful. Mobile Infrastructure Sharing can assist with the expansion in such areas. As per the industry responses, TRAI has determined that network sharing will increase competition and reduce the service prices further, which would be beneficial for the customers.

Despite so many benefits, operators are still reluctant to share site electronics fearing competition, accountability and scalability issues. However, quite a few operators have shown interest in giving infrastructure sharing a try. With emergence of LTE, this concept might get a boost simply because 4G implementation would require more mast sites. Evidently, passive sharing has found some interested takers but active sharing is yet to find ready acceptance. However, with telecom giants like Reliance and BSNL actively looking to tower-sharing, the future looks quite promising.

About the author: Nisha Meledath is a Contributing Editor for TradeBriefs. She can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it