What is network infrastructure sharing?

Mobile network operators offer connectivity and communications services over an existing network infrastructure which could either be owned or leased. In addition to electronic components, network infrastructure also includes passive elements such as physical sites and towers that are required to operate the network. Sharing mobile infrastructure is an option that reduces the cost of network deployment, particularly in rural areas or niche markets; it may stimulate migration to new technologies and the deployment of mobile broadband; and it may also increase competition between mobile operators and service providers, so long as safeguards are in place to prevent anti-competitive behaviour. Essentially, infrastructure sharing in mobile networks refers to the utilization of existing or jointly deployed network infrastructure by multiple mobile network operators.¹ This can either be done passively or actively.

• Passive infrastructure sharing

Passive sharing, sometimes referred to as site sharing or co-location, refers to the sharing of physical space, such as by buildings, sites, and masts, with separate networks.² This may allow for reduced risk of site acquisition, complete control of spectrum, and simple migration to other sharing forms; however, it may be an inhibiting form of sharing because it requires similar cell planning.

• Active infrastructure sharing

Active sharing is when elements of the active layer of a mobile network are shared, such as antennas, entire base stations, or even elements of the core network.³ This may include Radio Access Network (RAN) components like antennas, Base Transceiver Stations/Base Station Controller for 2G, Node B/Radio Network Controller for 3G, eNodeB for 4G, and gNodeB for 5G.⁴ It also includes mobile roaming, which enables an operator to utilize another’s network in areas where it lacks coverage or infrastructure. In active infrastructure sharing, user billing and accounting-related core node elements are not shared.⁵

Why network infrastructure sharing is encouraged

Infrastructure sharing is encouraged in some countries around the world to address the lack of infrastructure in rural areas.⁶ It is believed to be an effective tool for reducing costs and accelerating the utilization of shared infrastructure. According to a 2019 GSMA study,⁷ infrastructure sharing can facilitate the deployment of more advanced networks, such as 4G, LTE, and eventually 5G, by utilizing already established 2G and 3G infrastructure. In addition, it is essential for the deployment of mobile broadband and offers operators substantial cost savings, particularly when providing services in rural and remote areas. When operating costs are reduced, it may result in more affordable services for local residents, which benefits both service providers and consumers.

Infrastructure sharing in Kenya

The Ministry of ICT in Kenya recently welcomed feedback on the draft Access and Infrastructure Sharing Regulations, 2022. The Regulations purpose to:

• establish a framework for better cooperation in infrastructure sharing,

• eliminate unnecessary duplication of ICT infrastructure,

• maximize the use of existing and future ICT infrastructure,

• minimize the negative impacts on public health, safety, and the environment caused by the proliferation of infrastructure installations,

• and promote competition in the provision of ICT infrastructure.⁸

According to Section 5 of the draft Access and Infrastructure Sharing Regulations, 2022, the following conditions are necessary for infrastructure sharing:

• A telco deploying infrastructure for its own use must provide at least 30 percent more capacity than the projected owner’s needs.

• Publicly-owned infrastructure shall be operated and made accessible to infrastructure users in accordance with the principles of open access and non-discrimination. This is in reference to the Government of Kenya’s launch of the second phase of the voice Infrastructure connectivity project under the Universal Service Fund (USF), an initiative that will bridge the digital divide and expand access to communications services.⁹

• Passive infrastructure may be established at a location where co-location or infrastructure sharing with an existing infrastructure provider is not feasible.

• The Communications Authority of Kenya (CA) may impose infrastructure sharing obligations.

A reading of the Regulations reveals some key areas of concern, including charges, the applicable principles for charges, and dispute resolution. These issues will improve compliance with and enforcement of these regulations if they are effectively addressed.

Charges and the principles that may be used when applying charges

The issue of charges is of great concern in a time when price setting has a significant impact on both consumers and mobile networks hence prompting a number of questions – is it neutral and nondiscriminatory? Does it encourage transparency, accountability, responsibility, and fairness? It is necessary to develop guiding principles that support and reflect this and these principles include:

• Access charges must reflect a reasonable rate of return on capital employed and account for the investment made by the infrastructure provider.

• Access charges must only reflect the unbundled components that the infrastructure seeker wishes to use.

• Access charges must be transparent; and

• Access charges must be impartial, non-discriminatory, and no less favorable than those offered to the infrastructure provider’s subsidiaries, affiliates, partners, or other licensees.

The Australian Competition and Consumer Commission (ACCC) exemplifies a framework for establishing access pricing principles that govern access to services in the telecommunications industry, ensuring transparency and ensuring that charges are reasonable for the sustainability of the business. The Australian approach to charges and the principles that may be applied when applying charges is evidence of a neutral, nondiscriminatory model that promotes openness, accountability, and fairness. These are some of the considerations that could be taken into account when improving the section on just and reasonable charges and their accompanying principles.

Dispute Resolution

When infrastructure is shared by service providers, there is both cooperation and competition, and disputes may arise. Therefore, it is necessary that regulators provide alternative dispute resolution mechanisms that are efficient and straightforward to encourage negotiated outcomes while preserving the certainty of an adjudicated decision when required. The introduction of necessary enforcement tools will ensure not only compliance with infrastructure sharing regulations, but also their successful adoption.

Section 25 of the draft Regulations provides that “a dispute arising from the infrastructure sharing arrangement or agreement shall be referred to the Authority in accordance with the regulations relating to dispute resolution.” This section could be significantly enhanced and made more comprehensible if the Authority’s role in the resolution of disputes were specified in a clear and precise manner. Depending on the nature of the dispute, the Authority may order the parties to implement an interim access arrangement. Additionally, this section may specify that, as the governing body, the Authority will monitor and enforce compliance with these Regulations.

The future of infrastructure sharing

There have been arguments for and against sharing infrastructure, with both the opposing and proposing sides presenting compelling and valid points. Kenya is currently in the consultation phase, during which the laws are still up for debate and amendments are possible. The advantage of this is that we can learn from other jurisdictions about what works and what could be rectified, taking into account where we are as a nation and whether we are prepared for infrastructure sharing.

On the one hand, more countries are contemplating and implementing infrastructure sharing. With the introduction of 5G, more network-sharing agreements have been signed by telecommunications companies in the United Kingdom¹⁰ and Italy,¹¹ as well as reports that China Telecom, China Unicom, and China Mobile have considered infrastructure sharing.¹² Some regulators encourage mobile operators to share infrastructure due to regulatory and social benefits, including the reduction of network energy consumption and radio emissions, and the fact that mobile service providers can pass on cost savings to customers, resulting in significant social benefits. In addition, mobile operators are under pressure to expand network capacity due to the anticipated continuation of mobile traffic growth, which raises the cost of traffic management and reduces operator profits. As a result, network infrastructure sharing has been encouraged because it can substantially reduce mobile network infrastructure deployment costs.

On the other hand, infrastructure sharing is generally not feasible due to the number of technical and economic constraints. Communications Alliance and the Australian Mobile Telecommunications Association (AMTA) stated in a joint submission to the 5G inquiry that while the sharing of passive infrastructure is a “well-established industry practice”, the sharing of active infrastructure is “generally not feasible” due to a number of technical and economic constraints.¹³ A study of the mobile market published by the New Zealand Commerce Commission in September 2021 concluded that infrastructure sharing may increase in the future, however, its effect on competition would be contingent on the specific agreements mobile network operators enter into.¹⁴

Conclusion

Infrastructure sharing in mobile networks is a complex issue involving not only academic and industrial research institutions, but also national and international regulatory bodies,¹⁵ standardization bodies,¹⁶ and vendors.¹⁷As such, a multistakeholder approach is necessary. It is also important to note that infrastructure sharing and infrastructure sharing agreements are encouraged in regards to 5G connectivity. Given that Kenya is still utilizing 4G connectivity, regulators may need to consider what regulatory and social benefits, if any, would result from network infrastructure sharing in Kenya and whether network infrastructure sharing is feasible in Kenya. In addition to these, it is necessary to specify the regulations’ overarching purpose and any potential core issues, as well as the means by which they will be addressed.

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