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Operators can significantly save cost by network sharingdate: December 16, 2001 Most European operators will save significant costs through network sharing, according to a report by Analysys Research Limited. The report estimates that two mobile operators sharing network assets could achieve capital expenditure savings of up to 38 percent of the total cost of deploying 3G and up to 14 percent in operating expenditure. Many operators have already expressed an interest is sharing 3G networks because they want to reduce costs and are facing problems over coverage. The high cost of 3G licenses, for example in Germany and the UK, means that operators are seeking to save as much money as possible on the 3G roll-out. The most likely areas for sharing are mobile sites, 3G radio equipment and the backhaul layer, which comprises the equipment necessary to connect the base station to the backbone. These network components are the simplest for operators to share because both the site costs and the backhaul connections can be distributed according to various factors, for example subscriber numbers or traffic. The 3G radio equipment can be used by two operators because they will own different ranges of spectrum. Sharing makes particular sense in countries with a large, spread out rural population, for example Sweden and Ireland, and also in countries where a large number of licenses have been awarded with a backdrop of low population density. Here too operators need to save costs and to gain a competitive advantage in launching a new service in a new market. Austria is an example. Site availability is a further worry for operators, which means sharing makes sense. It is often difficult to find suitable new sites and environmental objections are growing. 3G networks require considerably more base station sites than 2G networks in order to offer the same coverage. Pressure is increased because 3G operators are rolling out networks simultaneously, unlike 2G where the implementation was staggered. The Analysys report says the willingness of operators to share will depend on the number of players in the field. The larger the number of players, the more likely incumbent operators are to share because they are likely to find a good matching partner with complementary assets and ambitions. Operators who need to implement their networks in a shorter timescale are also likely to be interested in sharing. At the moment network sharing is a topic for lively debate at the European level and regulators have so far tended to resist network sharing that might compromise the independence of each operator's network. The Analysys report says that network sharing to the fullest extent permitted by regulation will be critical for the success of many 3G operators in Europe and Asia. Changes in regulation may be necessary to enable operators to incorporate network sharing within their 3G business models. http://www.ericsson.com
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