Having listened in on the latest and what may be the final episodes to the Infrastructure Sharing debate at the Infrastructure Sharing Symposium, I can safely conclude that there is absolutely no reason why Mobile Network Operators (and Internet Service Providers and Internet Access Providers at some point) cannot share infrastructure.
A keen following of the discussion reveals that the main contention is on the loss of competitive advantage where the major operators who have invested the larger share in building infrastructure argue that their infrastructure actually gives them an edge over the smaller operators.
Econet, for example, insists that sharing their base stations will give the other operators more reach and access to customers. Telone who has refused to share their copper cables and landlines infrastructure may also insist that their landlines give them an FTTH advantage over the other networks.
This, however, has been proven as an emotional argument than anything else. I think it is rather ludicrous in the modern day to say,
Because I was first to implement something, I can choose not to share and those that want what I have can go on to duplicate, even if it means the investment results in three parallel highways to the same destination.
Ultimately the cost of delivery of that service is unnecessarily high and passed onto the consumer as prohibitive tariffs. To the consumer, the high tariffs make no sense at all as they are paying for duplication.
Another view says that Econet (which has the widest infrastructure) went through a torrid time to establish the business and they had better foresight and vision while the competition was “buying cars and buildings they didn’t need”.
Again this is purely emotional. How does that argument then relate to future networks? Should they have to commit the same investment that Econet did even though the current infrastructure is not yet fully utilised? How then are Mobile Virtual Networks supposed to operate?
How about the consumer? One might want to look at it this way. The spectrum on which the operators run their business on is a national asset owned by the citizens (consumers) under the custody of the government on their behalf.
From a consumer’s perspective, why should I have to pay more for a service because someone just sees it fit to conduct their business in a certain manner when it has been proven clearly that there is more benefit in doing it the better way. It is not outrageous then for the ministry, on behalf of the consumer to “withhold” the frequency?
A further argument also says that some operators have taken out long-term loans to develop infrastructure that they may have to repay at a loss because of the POTRAZ directive to reduce tariffs by 35%.
While the debate has never been about seizing anyone’s base stations, the operators with the larger investment instead stand to benefit the most both in liquidity and cash flow from a compensation perspective.
This value unlocked, gives the operators capacity to improve service innovation. If implemented immediately, there may be no need for Telecel to cut 20% of staff salaries or for Econet muscling suppliers, most of who operate in the same harsh environment, to reduce the price of their service.
The winning argument for me is that the government and the players themselves made a huge omission by allowing competition through infrastructure instead of service in the first place. Now that everyone is agreeable to that oversight and proportionally share the blame, we have come to a point as a nation where we have to move productively forward.
Realising that the implementation of the Infrastructure Sharing will result in lowered costs of providing a service and translate to lower tariffs to the consumer is not in question. Operators, the regulator (POTRAZ), the government and consumers are all in agreement that everyone benefits equitably.
It would seem then that the real reason why infrastructure sharing has not been implemented is because of pride and personalities differences where some operators insist that they can “go it alone”.
It’s like that joke where the bitter man chooses to lose one eye so that his enemy loses two. This is a situation of three blind men in a time of strife and one has found bread. Rather than that everyone receive full eyesight, he would rather maintain the status quo as long as he is eating.
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12 comments
I cannot see any problem in sharing infrastructures and those with the larger infrastructure stand to make more money. If the providers allow local roaming they will benefit from a roaming charge . e.g A Telecel user utilises Econet’s infrastructure the Econet make money. By careful programming the host supplier can give preference to their clients during times of network congestion.
I hope it was that simple. The problem is who determines the roaming fees, will these fees be paid by those piggybacking on others, and if problems such as non payment arise, who will abitter them and what will be the long term impact on investment in the sector. If any of these issues have no satisfactory answer, we might regress to those dark ages when we used to buy a sim card for R1000
If u put in money to build infrastructure,no one should force you to share it . Even if the consumers benefit by the most significant cost savings. Once we agree on that we can start a conversation.
where do you get the space in in cities to dig and install fibre optic cable.The truth is competitive advantage is not attained through physical infrastructure alone but through other intangible factors such as service quality,customer intimacy,value innovation as opposed to technological innovation alone
Noted. I will ignore your remark on space as I believe “if its underground space, the space is indeed available” and I will accommodate the principle of your message. My first concern is you are unfairly dismissing capital investment in infrastructure as a legitimate means of a competitive advantage which honestly is just wrong.If I can buy better technology, better machinery, better facilities for my business, is that not legitimate competitive advantage????? Secondly, whilst, I agree with all the points in support of infrastructure sharing, we should seek to compel the parties involved to share and not to force or demand them to. To further simplify, I mean to say your asset is your asset, you should not be forced to share even if everyone benefits.
We support sharing, its good and progressive. But what is wrong are free riders who have been buying cars and buildings , crying loudest about sanctions rather than focusing on how to get the business going.
Right now we have Netone which was given soft loan $200million to build infrastructure, is there anything visible being done by Netone, or more buildings are being bought?
Compare that to $300million Econet borrowed on international markets. Are we not all seeing what Econet used that money for. Within weeks of getting the cash, econet engineers were visible in every mountain and roads grafting.
How do that measure upto Netone and Telone? Both got soft loans from China.
The gvt must be a moderator and where necessary an enforcer thru potraz. We have a lot of money which was meant to develop our infrastructure not accounted for.
We do not want our Minister to be coming out guns blazing, that is the work of Potraz, but hang on, they are the custodians of some of our money we do not know where it is or being used for.
The minister must be clear that they should be no free hangers and riders, thats business. Every MTO should agree rates of sharing infrastructure. Our hunger for free stuff and donations have corrupted most of vision.
This is ridiculous…….it’s not fair especially to Econet because they spent sleepless nyts building their feature now u want to enjoy the benefits for free…….it can’t be possible
Its unfortunate that the regulator is somehow biased. Infrastructure sharing is convenient on condition all free riders meet their obligations to the benefactor. At the moment state Telcos owes millions of bucks to best performers and no one seems even to bother. Then is there trust if the same camel comes to your tent and say, “…may I just get my hump into your tent…”. Obviously NO, the head is already in the tent, then the hump is advancing and lastly, dispossession of the tent by the camel is imminent….. Honestly such scenarios will not even inspire confidence in the foreign investors. Are we doing more good than harm to our people. Cry the beloved country.
Real valid points. The ministry needs to lead by example. The state needs to cleanup their house first, pay up all the call transfer fees they owe and make sure everything is accountable then they can turn around and say “hey out there, we know what we doing look what we have achieved”
A ministry which is always fire fighting to me looks like an animal which cannot differentiate its head fron tail.
It should be holding press conference briefing people of what they have achieved so far and future projections not hot air threats everytime.
The writer forgets to mention one key point: Econet DOES share infrastructure. In fact, it is likely it has the most shared sites given its size. The argument as I understand it is on HOW the infrastructure is to be shared.
This is ridiculous…….it’s not fair especially to Econet because they spent sleepless nyts building their feature now u want to enjoy the benefits for free…….it can’t be possible
Sharing infrastructure is inevitable. Not only does it reduce costs for the operators but it also serves the space takes by those laborious structures. I believe that all the telecoms companies should sell there BTS to a single new entity that will in turn lease them to the operators and be in charge of building more BTS.