Wholesale Open Access Networks
Total Page：16
File Type：pdf, Size：1020Kb
Wholesale Open Access Networks Introduction The goals are often ambitious when governments has rolled out a network. Although it appears the propose establishing a single wholesale network network hasn’t delivered on what was promised. (SWN) or a wholesale open access network (WOAN) The lessons from these countries should serve as instead of relying upon competing mobile networks examples to other countries contemplating this to deliver mobile broadband services in their route.* They highlight the real challenges of SWNs and country. Citizens are promised better coverage, WOANs and are a wake-up call to those regulators more competition, and as a result, more affordable that look to them as an alternative to tried-and-true prices. However, research shows that of five countries approaches to network deployment. originally considering this option, only one, Rwanda, The GSMA’s position Some supporters claim that these networks will competing network operators. The GSMA believes deliver greater coverage than market competition that network competition can and does deliver mobile can. However, those making this claim often gloss network coverage. In areas where building networks is over the fact that in order to be built, the SWN or uneconomic there are other approaches. They include WOAN require significant public subsidies and other voluntary network sharing that can facilitate coverage forms of support which are typically not available to in a particular area. * See also, Frontier Economics report for the GSMA: Assessing the case for Single Wholesale Network in mobile communications, available at http://www.gsma.com/publicpolicy/assessing-the-case-for-single-wholesale-networks-in-mobile-communications WHOLESALE OPEN ACCESS NETWORKS The benefits of network competition go beyond on national policies and market structures. In practice, coverage. Innovation is a key driver of consumer value government mandated wholesale networks have been at the national level, and this occurs in networks as well much slower to expand coverage, perform upgrades as services and devices. While mobile technologies are and to embrace new technologies such as 3G and 4G, typically developed at the international level, the speed and they can be expected to prompt less innovation at which they become available to consumers depends than network competition. Recommendation The GSMA recommends a comprehensive consultation with all stakeholders which includes a review of past attempts and how each key goal might be met using existing market structures before embarking on an alternate strategy. Country summary Kenya Russia Rwanda Mexico South Africa Delayed, but in November 2016 it White paper detailing Not Quasi-SWN plan Implemented was announced the approach published implemented initiated and failed in 2014 Altán consortium will Oct 2016 build the network SWN Implemented SWN 4G coverage Yota – the wholesale objectives not Significant delays to operator remained in yet met, although roll out, which should urban areas only progress has been have begun in 2014 Availability made Low take up potential ly due No visibility to high pricing on pricing suggests affordability Affordability Affordability objectives yet to be met Retail competition No new MNVOs - never materialised competition in mobile as carriers were remains unchanged unable to reach an at present agreement Retail competition Retail Failure of initiative At this time there meant operators is little evidence to rolled out their own suggest that SWNs overlapping 4G have had an impact Efficiency networks on efficiency WHOLESALE OPEN ACCESS NETWORKS Kenya The push seems to have been abandoned The SWN push in Kenya has stalled due to a That never happened. Although no official complicated negotiation process with a number announcement has been made, the plan seems to of stakeholders. These struggles highlight how have since been abandoned. This is evidenced both complicated the SWN model is. by the lack of mention of the network in recently published draft ICT policy and framework documents, Originally, a network was proposed through a public- and by the recent recent assignment of 800MHz private partnership in Kenya in order to ‘fast track’ spectrum to existing mobile operators who have since roll out of LTE services. Under this framework the commenced the deployment of broadband services government would provide spectrum and private using the spectrum. companies would roll out and operate the wholesale network. The initial plans suggested that an LTE consortium should cover 98 percent of the population. Mexico The roll-out has been delayed several times Mexico’s inability to get its project off the ground also The roll-out was intended to begin in 2014 and be highlight some of the issues. Out of the original 21 operational by 2018. In May 2015, the government qualified bidders, most struggled with the business announced the investment target had been reduced case. Also, multiple delays have forced the country’s from $10 billion to $7 billion and the estimated number regulator to lower its ambitions on funding and more of cell towers will be closer to 12,000 instead importantly coverage. of 20,000. Mexico first made constitutional changes to try to With just one bidder left, the winner was announced in foster competition in the telecommunications and November 2016. The Altán consortium will get access broadcasting markets. As part of this, it proposed the to 90 MHz of contiguous spectrum in the 700 MHz deployment of a shared public network for broadband band to build the wholesale LTE network. access and mobile telecommunication services. WHOLESALE OPEN ACCESS NETWORKS Rwanda The network is live, but can’t live up to expectations The country’s LTE-based network was launched as Also, there is no sign mobile broadband services have planned in late 2014 in the capital Kigali. The project is a become more affordable because of the government public-private partnership between the government and intervention, according to data from the regulators Korean operator KT. However, launching a network is just website. This contrasts with the cost of voice services, the first step. The government is still unlikely to achieve which has fallen over the same period. coverage, price and competition goals. Commercial negotiations set the wholesale prices As of July 2016, the network was available in 25 (out They are reviewed twice a year. Over the lifetime of the of 30) districts with population coverage estimated at network there have been several significant reductions in around 30 percent. The current progress in terms of wholesale prices. But they have not translated into lower coverage suggests it is unlikely the original coverage retail prices on a consistent basis. target of 95 percent will be achieved by the end of 2017. The take up appears to be limited so far. A failure attributed to the cost of the services. Exhibit 1. Voice trend in Rwanda 150 100 50 RWF Average tariff in Average 00 2009 2010 2011 2012 2013 2014 2015 2016 Q1 Onnet Tariff Offnet Tariff Source: RURA Statistics and Tariff information in Telecom Sector as of March 2016 http://www.rura.rw/index.php?id=83 WHOLESALE OPEN ACCESS NETWORKS Exhibit 2. Price per MB – mobile broadband 60 50 40 30 20 10 Price per MB (RWF) Price 00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2015 2016 MTN Tigo Airtel Source: RURA quarterly publications – statistics and tariff information in Telecom sector Note: The regulator’s website does not seem to provide information on how this price measure was In order to retail the wholesale services they buy network. Although KT's 4G services are promoted via from KT, the MNOs are commercially inclined, but not MNO's retail activities, the perception in the market is obligated, to promote 4G services, although since no that MNOs themselves will be responsible in the eyes 4G spectrum will be allocated to the MNOs if they of consumers for any issues with coverage and quality wish to provide 4G it must be provided through KT’s of 4G services. WHOLESALE OPEN ACCESS NETWORKS Russia The initiative failed as carriers couldn’t reach an agreement In Russia, Scartel (brand Yota) was allocated 40 MHz allowed Yota to act as both a wholesaler and retailer of spectrum in the 2.6 GHz band and given the first limiting Yota's incentives to offer wholesale terms licence to offer LTE services with conditions that attractive to other operators with which it would wholesale access must be provided to other mobile compete at the retail level. operators. It looks like a revived plan for a full-blown SWN However, this initiative failed as carriers were not able (similar to Rwanda or Mexico) also has been rejected to reach an agreement and went their own way on following the roll out of LTE services by the Russian LTE, after reportedly insisting on choosing their own mobile operators. vendors. The main issue was that the government South Africa The latest project’s larger scale comes with larger risks The South African government’s recently renewed to what has been proposed or implemented in other efforts go further than other countries have dared countries, but suggests a much larger scale. by using all spectrum bands. Irrespective of its motives, the government is putting A white paper published in October proposes the a lot of faith in an unproven model. The repercussions, creation of a WOAN in South Africa and as part of this if the project goes ahead, could be irreversible and presents significant changes to access policies and result in a negative impact to the country’s economy. spectrum licensing. If the project goes ahead as proposed in the It proposes a public-private consortium to develop White Paper, it will have repercussions on the an open access wireless network. The consortium structure of the industry and the country's economy.