Infrastructure is the core component of many operations globally, whether you’re looking at the food industry or the telecom industry. Infrastructure for the telecom industry is crucial in many aspects, as without it, there is no connectivity.
Traditionally, telecom providers needed to build their own infrastructure and bear maintenance costs for the same. However, with rising demand, constant technology up-gradation, and other complexities, infrastructure sharing has become more commonplace.
Telecom infrastructure sharing defines how infrastructure can be shared among different telecom providers and how it is done. Depending on your country, the regulations for sharing can be various. Keep reading to find out why infrastructure sharing is essential for today’s telecom industry and more.
Why Is Infrastructure Sharing Needed?
When the telecom industry started booming, only a few players in the market had the significant capital to build the required infrastructure for optimal functioning.
While this infrastructure was built and these telecom monopolies functioned quite successfully in the industry for many years, they also began to face problems due to constant innovations in the industry.
Various infrastructural components that telecom providers require include:
- Electric components
- Physical telecom towers and cables
- Transmission equipment
- LANs
- Public switching equipment
The performance of all these components as a cohesive whole determines the quality of service that customers receive. Therefore, telecom providers must have the best equipment and infrastructure possible to keep functioning. Finding sites for building this infrastructure is also another problem that providers face. With more people indoors, the network demands for indoor areas have grown exponentially. However, due to space limitations within building structures and the unavailability of many sites for telecom providers, there is a constant struggle to find an optimal site.
However, from 2G to 5G, the constant upgrades require new infrastructure, which can be costly. Not only this, new regulations require providers to follow specific guidelines when installing this infrastructure. It can become problematic as the costs can become unsustainable after some time. It can quickly lead telecom businesses to run into extreme debt.
In such situations, telecom sharing provides an additional income stream for providers building their infrastructure from scratch. It also ensures that they have the funding to make upgrades and follow regulatory guidelines as they are released.
Telecom service providers are constantly attempting to increase their network capacity due to increased traffic and demand. However, handling increased traffic while increasing network capacity comes at increased costs, leading to providers’ lower profits.
Government Policy
In the United States, the Federal Communications Commission handles regulating all non-government use of radio spectrum, interstate telecommunications, and international telecommunications. The Telecommunications Act of 1996 further paved the way for deregulating infrastructure for telecom providers.
Through deregulation, the infrastructure competition increased. The Act enabled new providers who had just entered the industry to lease infrastructure that is or was used by other providers (even their competitors).
Many providers can also access legacy infrastructure (for 2G, 3G, and 4G) that providers who have moved on to the newest telecom technology don’t require anymore. With many bottlenecks in deploying 5G (such as banning specific companies from supplying 5G equipment in the country), telecom providers need to know how to tackle these issues without increasing costs. In such a situation, following regulations and other restrictions can be complicated and expensive for all telecom providers.
Benefits of Sharing Telecom Infrastructure
Through sharing infrastructure, duplication is limited (for creation of infrastructure) and amps up investment in uncovered areas, improves customer satisfaction, and directs more funds to research and development. Telecom providers who have to spend less to use infrastructure can invest in other areas to ensure better customer service.
Due to telecom infrastructure sharing, the high wall that has previously been barring new entrants into the telecom industry has diminished. An increasing number of telecom providers can now enter the sector without any problems.
Types of Sharing By Service Providers
When you’re wondering what types of infrastructure sharing models are in use by telecom providers today, there are several. The most prevalent type of sharing is technology. Depending on your requirements and aims, you can choose any one of the following:
- Active Sharing: Sharing electronic components like radio access, core, and backhaul networks. Providers will offer access to others’ resources freely to serve their own customer database better. It has become more common with the oncoming 5G implementation to lower prices for all telecom providers.
- Passive Sharing: Non-electrical components such as power supply, management system, backhaul transport networks, and more are shared. Physical sites for telecom stations are shared through this model and are one of the simplest ways to share infrastructure. It involves sharing costs for trading, leasing, contracts, and other technical facilities. This form enables telecom providers to remain competitive much more quickly.
- Spectrum Sharing: It is also commonly referred to as frequency sharing. The current spectrum availability is scarce, which drives up both competition and costs. It is being discussed but can occur through spatial, capacity, and priority sharing.
Way Forward
The telecom sector is an essential component that drives innovation for many other industries. It is a core component for many processes today, and the industry’s success is crucial. However, as technologies continue to get more complex, telecom providers will have to find solutions to resolve these problems. These problems must be settled without driving up costs.
As the costs for implementing new telecom technologies increase, providers must know where to cut costs, and infrastructure sharing is one way. When you are considering driving down costs and using that in other areas to increase customer satisfaction, infrastructure sharing is ideal.
While spectrum sharing is still a hotly-debated topic, many hope it becomes adopted nationally to further drive down operating costs while increasing the profit margin. It is expected that it will be released with concrete regulations so that providers can reap the benefits.
Infrastructure sharing can take many forms, depending on each telecom provider’s individual requirements. To maintain optimal competition, services, and customer satisfaction, telecom providers must adopt this method for optimal success in the future.
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