As argued above, one of the ways in which operators can improve their business case for 5G is by adopting more radical approaches to reducing the cost to deliver data, including sharing of passive and active networks.
In Poland, a government-driven effort to improve cost-efficiency and roll-out timescales for MNOs will see three MNOs sharing a national 5G network with two state-owned entities. Orange, T-Mobile and Polkomtel have signed a memorandum of understanding with Poland’s state development fund PFR and the state-owned fiber provider Exatel. The largest MNO, Play, has not signed up, but according to Reuters reports, it is due to do so, but still has to gain some corporate approvals.
The partners will form a consortium to develop 5G infrastructure in the 700 MHz band, to lower costs and adopt a united approach to network security.
Polish news service Telko.in reported, earlier in the autumn, that the network plan assumes “the financial and substantive participation of commercial operators in the construction of the 700 MHz network in exchange for the possibility of using the capacity of the new network” via network slicing,
The scheme was originally proposed by Exatel. Its CEO, Nikodem Bończa-Tomaszewski, told Business Insider Polska earlier this year that a consortium of public and private companies, co-investing in the new network (financially or by supplying resources like fiber backhaul), would be the “safest and cheapest way” to implement 5G. He said the emergence of “softawareization” in 5G networks would make it easier for operators to secure their own virtualized share while still being able to differentiate their services and QoS.
Other benefits, said Bończa-Tomaszewski, would include an improved ability for the government to oversee network security as cybersecurity concerns, stemming from US-China tensions, start to overshadow 5G plans in Europe and elsewhere.
Pawel Borys, CEO of PFR, tweeted: “The goal of the joint venture is to ensure nationwide availability of services 5G in selected bands, technology security and low service prices thanks to synergies of common infrastructure.”
The shared network will have several potential benefits for the operators. It could avoid them having to pay the high prices that typically accrue to sub-GHz bands in auctions; and keeping this scarce spectrum in a single chunk could be a far more efficient use of limited resources, for all stakeholders.
Like many operators, they are focusing mainly on a capacity play with 5G, which makes midband spectrum like 3.5 GHz more important for competitive edge and service differentiation, while the propagation qualities of 700 MHz could conceivably support a shared network for rural access and some indoor applications – areas where MNOs typically find it impossible to identify a profit model.
And it will be impossible for all four MNOs to secure an individual licence in 700 MHz because the spectrum is too scarce, so they are scared of an unbalanced market, and of being the operator which loses out.
The broad support is a turnaround since the spring, when only Polkomtel-owned Plus seemed interested in the sharing idea. At that time, T-Mobile indicated it was reluctant to support initiatives that might help its rivals, new and old, to reduce its 5G headstart (it has already starting rolling out services); while Orange said it would prefer to deploy alone.
The network will not be usable until 2022 or 2023 since it is currently in use by TV providers. And there are interference issues, since a significant portion of the 700 MHz band is unusable for cellular in many regions because Poland has not agreed a deal with Russia over its TV signals.
There are many approaches to network sharing, including joint ventures or neutral host operations for passive towers, fiber and/or active RAN. State-sponsored efforts have rarely succeeded – examples in Russia, Kenya, South Africa and elsewhere have foundered on conflicts of interest and the entrenched MNO desire to retain control of the network. However, the costs of 5G will drive more operators to set aside those fears and work together, and as Poland shows – as well as a shared 4G scheme in Mexico – in some cases, the government will be able to be a catalyst for a new approach.