Trends in telecom infrastructure sharing in emerging markets

Mobile revenue growth predictionStephane Teral, executive director of research and analysis, mobile infrastructure and carrier economics, IHS Markit, has revealed top 5 trends in telecom infrastructure sharing in emerging mobile markets.

All telecom service providers are increasing their focus on wireless customer satisfaction and retention and business and network transformation – without increasing Capex (capital expenditure) significantly.

Telecom operators prefer to de-emphasize network operations through outsourcing and managed services as well as network sharing to preserve margins and sustain cash flow. Most mobile service providers face the challenge of retaining revenue growth during tough market conditions.
Mobile revenue CAGRGSMA says total mobile revenues reached $1.06 trillion (+2 percent) in 2016. GSMA says annual mobile revenue growth will be between 1–2 percent globally to 2020. Overall, the modest global growth outlook reflects a combination of slowing unique subscriber growth, regulatory intervention and increased competition.

Though global mobile subscriber growth continues to slow, regions where subscriber penetration is lower are forecast to achieve relatively higher revenue growth rates to 2020.

Telecom infrastructure sharing trends

Network sharing is working well in Africa, India, and Latin America. Nigeria is the most successful telecom network infrastructure sharing country.

India pioneered network outsourcing in 2005 and has moved fast to network sharing and managed services. EMEA is leading this area now with network sharing deals all across Eastern Europe and Africa.

EMEA-based IHS Towers is contributing to the success of Nigeria. The business model of IHS Towers involves buying the cell towers from the service providers, and leasing and managing those towers for the service providers. This allows the company to minimize operational expenditures, and service providers can better focus on the customer experience.

More service providers will sell their towers to companies like IHS Towers. There is the opportunity for others to create competition in the tower business.

The telecom tower business is moving from emerging to developed countries. This is happening in Italy.

Network function virtualization (NFV) will provide the next wave of operational efficiencies in network sharing.

By moving more network functions from hardware to software, using IT components and platforms, the cost of network nodes decreases and new services can be turned up and down at a power of a click. Overall, with the concept of network slicing, it will become easier to share networks among several service providers.