State-backed shared mobile networks seem like a good way to fast-track deployment of new technologies and services, while reducing the cost burden for operators. But they have a very poor track record, as failures in Russia, Kenya and South Africa, among others, have demonstrated during the 4G era, while there are still doubts over how far Mexico’s national wholesale LTE network in the 700 MHz band will affect the market.
The latest country to propose a national wholesale network, this time to accelerate 5G roll-out and encourage new service providers, is New Zealand. The idea has been pushed by wholesale operator Chorus, but has met with a howl of disapproval from the incumbent MNOs.
Chorus, which is building most of the state-backed Ultrafast Broadband (UFB) wholesale fiber network, has argued that the same model should be applied to 5G, to reduce the cost and time to market for new mobile services and support fixed/mobile convergence. The company points out that 5G will require dense infrastructure which will not be cost-effective for individual operators to deploy on a national level, so if left to market forces, nationwide 5G would not be sustainable, and might not emerge at all.
But Vodafone New Zealand called the proposal “self-serving and misleading”, while Spark – which was split off from Chorus during the break-up of the former Telecom NZ’s retail and wholesale operations – said it would create a monopoly.
The third MNO, 2degrees, insisted that infrastructure competition between the MNOs is robust, but would break down if they were sharing a common network. And all the operators point out that the conditions that necessitated state intervention to achieve a national fiber roll-out – the near-monopoly held over the fixed network by Telecom NZ – were not present in the mobile sector.
Chorus CEO Kate McKenzie had claimed she was finding industry players “receptive” to her proposal.
Chorus was separated from the former Telecom NZ after it won the contracts for 70% of the UFB rollout, with Telecom NZ agreeing to split its wholesale and retail businesses as a condition of the deal. Its wholesale business became Chorus while its retail business was spun off as Spark.