network sharing overview coleago

7/31/2019 Network Sharing Overview Coleago

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Network Sharing business planning

Our approach to conducting a feasibility study fornetwork sharing and developing a strategy for

implementationTo receive a full description of the network sharing processmap please contact us

July 2010

Stefan Zehle, MBA

Tel: +44 7974 356 258

[email protected]

CEO, Coleago Consulting Ltd

Graham Friend, MA

Tel: +41 79 855 1354

[email protected]

Managing Director, Coleago Consulting Ltd


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copyright Coleago 2010

Network Sharing

1 Network Sharing Overview

2 Coleagos Network Sharing Business Planning Process

3 About Coleago Consulting

4 Examples of Network Sharing

C

onten

ts


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Explaining types and of network sharing and benefits to mobile operators

Network sharing, an introduction

Network Sharing

1


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Network sharing is becoming an imperative in developed and emerging markets

The Trend Towards Network Sharing

In the early days of mobile, operators built entirely separatenetworks. Since then there has been a gradual evolution from thisapproach, starting with site sharing (often mandated by theregulator), and now going as far as merging networks i.e. sharing the

radio access network (RAN).Infrastructure and network sharing deals have been agreed betweenmajor operators in Europe, North America and Asia and elsewhereshowing compelling opex and future capex savings. Industry playersand regulators appear to agree that at this stage of the mobileindustry life cycle, it does not make sense to build entirely separatenetworks.

Models of Network Sharing

There are six main models of network sharing:

site sharing and / or tower sharing is the most common form of

network sharing; Backhaul / backbone sharing, suitable where mobile operators

have to build their own transmission rather than lasing capacityfrom a fixed network operator;

full RAN sharing, including backhaul transmission is morecomplex and hence rarer;

backbone (core) transmission sharing;

core network sharing, which is quite rare;

national roaming, which does not involve asset transfer.

Each sharing model has its own strategic and economic drivers,

technical requirements and regulatory considerations. An operatorspecific assessment must be made to evaluate network sharingpotential and attractiveness considering:

the overall strategy as well as the value and competitive positionof the current and planned network;

the availability of suitable partners and partnership models basedon existing assets and competitive positions;

market structure and forecast usage patterns; and

regulatory imperatives and constraints.

The Benefits

The greatest benefit of network sharing are substantial reductions in

cash expenses: Roll-out capex can be reduced, thus yielding immediate cash flow

benefits; and

Lower network opex can be achieved, providing a long termsaving and hence higher EBITDA margins.

Network sharing can speed up coverage roll-out, notably formobile broadband services, using higher frequency bands.

National roaming provides an attractive option for new marketentrants and operators who do not have lower band spectrum. Insome markets regulators have mandated national roaming to aidnew entrants.

Shared networks also mean shared investment risk particularly inthe case of mobile broadband.

In markets where coverage obligations are a feature of licencing,network sharing can be an attractive alternative to fulfil suchcoverage obligation. Collaboration between MNOs makes it morecommercially feasible to cover regions with low population density.This may be particularly true in emerging markets and may actuallyhelp to deliver policy objectives with regards to making internetaccess available in rural areas.

Network Sharing


Operators can

achieve significant

savings in cost and

faster coverage roll-

out through sharingof network assets.

In mature markets

with limited or no

revenue growth,

cash flow can only

be increased

through cost

reduction. Hence,the recent surge in

sharing

infrastructure


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Drivers for network sharing are different for mature and emerging markets

The Drivers for Network Sharing in Mature Markets

Site sharing is nothing new. Often site sharing, and particularly mastsharing, was mandated by regulators keen to accelerate new marketentry and to minimise the environmental impact of BTS s ites.However, recently network sharing has moved to the top of many

operators agendas. The main drivers are: In mature mobile markets revenue growth is limited or total

industry revenue may even decline. In this situation the only wayto grow cash flow is to reduce opex and future capex.

Mobile operators are now building mobile broadband networks,notably HSPA and LTE. These require considerable investment inthe RAN and there are costs in acquiring new spectrum (2.6 GHz,700 / 800 MHz). Given that there are significant demand andtechnology uncertainties, operators are keen to minimise capexassociated with mobile broadband.

It is much easier to agree network sharing for new networks i.e.

mobile broadband, than to introduce sharing in existing 2Gnetworks.

Consistent with the industry life cycle, i.e. reaching maturity,consolidation among operators is becoming more common. Austria,Australia, the USA, and the UK are some markets whereconsolidation is already a reality. Of course consolidation in thesame market always raises competitive and regulatory issues.Network sharing can be viewed as consolidation by stealth.

Depending on the extent of sharing, the definition between whatconstitutes an MNO and an MVNO will become blurred. If two MNOspool the vast majority of network assets in a joint venture networkoperating company, what remains of the separated MNO looks in factmore like an MVNO.

Under this scenario there is in effect consolidation at the networklevel of the value chain. Network sharing, in particular RAN and corenetwork sharing may be a mechanism whereby consolidation can beintroduced at wholesale (network) level, while keeping retailoperations separate.

Since regulators are mainly concerned with competition at the retaillevel, forming a Network Company may gain regulatory clearanceeven where regulators block full consolidation. This means operatorscan achieve some of the benefits of consolidation through extensivenetwork sharing.

Mobile Broadband in Emerging Markets

A major concern of policy makers in emerging markets is to bringinternet access to rural areas. These rural areas tend to have thefollowing characteristics:

Lower concentration of demand

Lower than average household incomes Lower concentration of businesses

Lack of backhaul and backbone infrastructure

Long distances between population centres

Given these characteristics, the economic case for building mobilebroadband coverage is weak.

However, if mobile operators pool resources to jointly build mobilebroadband coverage in rural areas, the business case for rolling outHSPA or LTE coverage improves dramatically. Therefore, regulatorsin emerging market may actively encourage network sharing,

particularly HSPA, in rural areas as a means to bring internet accessto those populations.

Adverse effects on retail pricing are unlikely since operators stillcompete in urban markets and generally licence conditions preventgeographic price discrimination, i.e. tariffs must be national.

Network Sharing


In some mature

mobile markets

consolidation is

already under way.

Network sharing canbe viewed as a form

of industry

consolidation. India

is a case in point

because true

mergers impossible

due to regulatory

constraints.


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Network Sharing

Types of network sharing

The big investment

in transmission

required for HSPA

and LTE networks

push mobileoperators towards

network sharing

which extends well

beyond simple tower

sharing


Network ABTS/Node B

Network BBTS/Node B

Network ABSC/RNC

Network BBSC/RNC

Network ABackhaul

Network BBackhaul

Shared MastShared Site

Antenna A

Antenna B

CoreNetwork A

CoreNetwork B

Site / Tower Sharing Backhaul / Backbone Sharing

National Roaming

Note: In somecases only the

tower is sharedShared

Backhaul

CoreNetwork A

CoreNetwork B


Network ABTS/Node B

Network ABSC/RNC

Network A

Backhaul

Mast A

Antenna A

CoreNetwork A

Subscriber ofnetwork B roams onnetwork A.

National roaming is adifferent approachbecause it does notinvolve the sharedownership ofphysical assets.

Core Transmission Ring Sharing

SharedTrans-

missionRing

Netw.AMSC

Netw.AHLR

Netw.ASGSNGGSN

Netw.AOMC

Netw.BMSC

Netw.BHLR

Netw.BSGSNGGSN

Netw.BOMC

RANNetwork A

RANNetwork B

VASNetwork A

VASNetwork B

Shared Ring and Core Netw. Elements

SharedTrans-mission

Ring

Netw.AMSC

Netw.AHLR

Netw.ASGSNGGSN

SharedOMC

Netw.BMSC

Netw.BHLR

Netw.BSGSNGGSN

RANNetwork A

RANNetwork B

Shared VASPlatform

Source: GSMA, adapted by Coleago

RAN Sharing

SharedBTS/Node B

SharedBSC/RNC

SharedBackhaul

SharedAntenna

CoreNetwork A

CoreNetwork B


Antenna A

Antenna B

Network ABTS/Node B

Network BBTS/Node B

Network ABSC/RNC

Network BBSC/RNC

Backhaul /backbone

sharing canproduce huge

benefits inemerging

markets

Indicates shared network assets


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The potential benefits of network sharing are wide

Network Sharing


As mobile markets

mature,

management focus

is shifting to

rationalisation.Network sharing

reduces cash costs.

Benefits of Network Sharing

Type of Sharing Rationale

Passive Site Sharing Reduced site acquisition times for new

entrants Access to locations of strategic importance,

e.g. where space for new sites is limited

Increased likelihood of obtaining planningpermission for new sites

Reduced opex (site lease)

Expansion into previously unprofitable areas

by reducing capex and opex requirements Counter environmental / health concerns, in

the context of increasing pressure to reducethe number of cell sites due to health concerns

Reduced competition for sites vis-a-vislandlords

Mast / TowerSharing

Reduced site acquisition and build completiontimes

Reduced capex (site build)

Reduced environmental and visual impact

Transmission Backhaul /Backbone

Shared build cost, particularly in emergingmarkets

Shift forward the point where deployment offibre rather than MV is economic

Access RAN Fewer sites and masts for the same coverage

Reduced environmental and visual impact

Reduced capex and opex, very important iffibre backhaul upgrade is considered

Core Network Fibre Ring Capex and opex savings where sparecapacity

Capex saving fibre upgrade e.g. from MW

Core NetworkElements

Delayed investment in core network elements Reduced maintenance and operational cost

VAS Platforms Delayed investment in VAS system elements

Increased capacity VAS systems

Enhanced capability

Reduced maintenance and operational costs

Roaming National Reduced or delayed infrastructure investment

Speed to market

Increased coverage, particularly in remoteareas

Source: GSMA, adapted by Coleago


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Network sharing can deliver network opex and capex cost savings of up to 60%

Network Sharing


Much of future capex

is capacity related,

i.e. driven by mobile

broadband services.

A collaborativeapproach can yield

major savings in

backhaul and

backbone

transmission.

Potential cost Savings from Network Sharing

Sharing Model Savings in Roll-Out Capex Savings in Network

Operations andMaintenance

Site / Mast Sharing

Civil works, some passiveRAN

Site rents

5-10% 5-10%

Transmission Sharing

Backhaul 5-15% 5-15%

RAN Sharing Passive and active RAN

Site rents

Transmission capex / opex

20-25% 20-25%

Backbone sharing

Backbone (core network)transmission

5-15% 5-15%

Core Network Sharing

Backbone sharing Core network elements

15-25% 15-20%

Total Up to 65% Up to 65%

Depends on the split of towervs. rooftop sites with thebiggest capex saving potentialfor tower sites

Source: Northstream: GSMA, Network sharing; PTS (Swedish regulator); Bjrkdahl & Bohlin; McKinsey; Coleago

Depends hugely on geography,capacities required andexisting fibre infrastructure

Joint fibre backhauldeployment for mobilebroadband may deliver largesavings.


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Tower or Site Sharing

Tower / Site Sharing

Site sharing is favoured in urban areas, due to complexity and theexpense of finding new sites and therefore reduces lead times toimprove coverage. In rural areas, the high expense of connecting topower and road access can drive site sharing. Environmental (visual)

and public health concerns are an additional driver for tower sharing.When site sharing also involves tower or mast sharing, theeconomics are even more compelling. The civil works of mast sitescan account for 65% of RAN capex in suburban and rural areas.

Tower / site sharing is common because it does no involve thesharing of active network elements, the focus is on civil works.

Technical Considerations

In many urban areas in order to satisfy local planning authorities,operators disguised masts as lampposts or trees. This may blockmast sharing.

Several antenna aspects such as tilt, height, azimuth angle etc.must be compatible between MNOs

Tower sharing requires common view on future alterations on theshared mast and issues may arise if operators acquire differentspectrum blocks in future auctions.

Deployment Examples

Site sharing is common in both developed and emerging markets andis mandated by the regulator in several markets.

In France 20-40% of sites are shared, depending on the operator.

T-Mobile and O2 share sites for their 2G networks since 2001 and

for 3G networks in Germany since 2003.

In India, operators have created jointly owned tower companies(e.g. Indus Towers) and over 40% of all sites are shared, oftenwith multiple networks tenants on one site.

In the US and the UK independent tower companies host severaloperators on the same site.

In Pakistan Telenor, Ufone and Warid agreed in 2006 to sharesites and towers to reduce rural coverage roll-out costs.

Regulatory Aspects

Regulators encourage site / tower sharing due to city planning andenvironmental purposes. Often site sharing is a licence

requirement.

In many countries regulators mandated that rental prices for sitesharing must be based on cost, often with the view to help newentrants.

Network Sharing


Site and mast

sharing is already

widely adopted and

usually

uncontroversialbecause it does not

involve the sharing

of active network

elementsExample Shared Sites

Generally, only mast, site, outdoor shelter, and other equipment(power connection, power backup, air conditioning, fence) areshared. Radio equipment as well as transmission can also be

shared, but with a significant increase in complexity.

Shared

Tower

SharedShelter

SharedEnclosure

Shared

Land

SharedPower

Generator
http://en.wikipedia.org/wiki/File:CellPhoneTower_OR.jpg


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The tower or site sharing may be done through 3rd party tower companies

Tower Business Rationale

Saddled with the high cost of 3G licences and the cost of 3G buildout, many mobile operators sought to release capital from the sale oftheir tower assets. This also had advantages from the stock marketperspectives since the telecoms business and the tower business

were valued on a different basis. Mobile telecoms operators aredeemed to be growth stocks whereas the tower business is based onpredictable, stable cash flow.

The communication tower or mast business is a large businessdominated by infrastructure and or real estate orientated companiesas opposed to technology companies. For example Crown CastleInternational Inc. and American Tower Corp. are the dominantindependent tower companies in the USA.

More recently, tower companies also moved into the transmissionspace, benefitting from the growth in demand for backhaul as a resultof increase mobile data traffic. An example if FiberTower in the USA.

The features that make the tower business attractive to investors are:

Restrictions in granting building permits may create localmonopoly. It is this which also makes is risky for operators to selltheir tower assets to a dominant operator.

Long-term contracts are the norm.

High switching costs result in high renewal rates.

Most of the operational expenditure is fixed.

The combination of predictable revenue and opex results in asteady cash flow.

Tower companies have low borrowing costs because they canoffer towers as collateral.

Renting Tower Space

The rent or lease prices mobile network operators have to pay totower companies depend on a number of factors.

Location and availability of alternatives are a significant issue. Aswith the real estate business what matters is location, location,

location. In some cases operators share in the construction cost in

exchange for a rent reduction.

Volume discounts are common as are discounts for a long termcommitment.

The Risk of Creating a Tower / Site Monopoly

In countries where operators have sold towers and rooftop sits to 3rdparty operators, they have effectively created a monopoly with controover an essential facility.

In many countries, it is difficult or impossible to build new sites as site

build authorisations are refused. This means the only option is to goonto an exiting site owned by a site or tower company. In somemarkets independent site companies control virtually all sites in agiven area. This means the mobile operators become price takers ina monopoly market. For example in the UK, this has had somenegative impact on operating costs and lead to litigation.

Network Sharing


Some of the early

tower sharing deals

were driven by the

desire to release

capital by sellingassets to tower

companies.

However, there is

the risk of creating a

tower monopoly


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RAN Sharing (1 of 2)

RAN Sharing

RAN sharing implies sharing the entire Access Network, includingbackhaul transmission. Traffic is split at the point where the MNOscore networks take over. Variations in architecture and implementedtechnologies make this approach more difficult to execute. It is

dependent on technological specifics of each network.Where new networks are being rolled out e.g. wider 2G coverage inrural areas or 3G mobile broadband, RAN sharing is mainly a way toreduce capex requirements. Where RAN sharing is introduced in anexisting network, the main driver is to reduce opex, for example bydecommissioning sites.

RAN sharing can be an attractive way of reducing capex to coverrural areas, for example to fulfil regulatory requirements.

Obstacles to RAN Sharing

RAN sharing is complex from a contractual and technical

perspective. These difficulties are much greater for existing networksthan for new networks. Hence RAN sharing is talked about more inthe context of rolling out mobile broadband (HSPA and LTE)networks than for existing 2G networks.

There is a significant interplay between existing assets and the viewtaken on the evolution of mobile broadband. There are many demandand technology uncertainties, but RAN sharing requires contractualcertainty. Therefore it takes several months to agree RAN sharingcontracts. For example, T-Mobile and 3 in the UK required 7 monthsto develop the heads of agreement and a further 5 finalise thecontract. Hence it is important to identify show stoppers early on inthe negotiation process.

RAN Sharing and Technology Evolution

RAN sharing may pose problems in the context of technologyevolution or if one of the sharers fails to win spectrum in futureauctions.

Avoiding site build capex is one of the sources of values for new

spectrum. Many countries plan to auction spectrum in the 2.6 GHzrange and in lower bands 700 or 800 MHz. Operators who share theRAN may have to coordinate their bidding, yet may be prevented todo so under auction rules.

1

Network Sharing


Sharing the RAN

increases the

savings potential

and the roll-out of

mobile broadbandprovides an

opportunity to realise

these savings

RAN Sharing

SharedBTS/Node B

SharedBSC/RNC

SharedBackhaul

SharedAntenna

CoreNetwork A

CoreNetwork B



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RAN Sharing (2 of 2)

RAN Sharing Examples

Despite the legal difficulties, technological complications andstrategic concerns RAN sharing is growing, particularly in the contextof rolling out mobile broadband networks.

Examples of RAN include:

In December 2007,T-Mobile and 3 formed Mobile BroadbandNetwork Ltd, a JV to build and operate a joint network in the UK.

Following the 2008 Advanced Wireless Services (AWS) spectrumauction in Canada, in 2009 Bell & Sasktel and Rogers & MTSrespectively agreed to build joint HSPA networks.

In Sweden,Telenor and Tele2 are jointly rolling out an LTEnetwork.

Regulatory Aspects

Some regulators (e.g. Germany, Austria, Denmark) consider thatRAN sharing may create market distortions and does not deliver

additional advantages to the public:

If one operator in a three player market has a higher cost basebecause they do not share the RAN with the other two thisreduces their ability to compete on the basis of price.

If spectrum is auctioned, there will have to be some coordinatingbetween competing operators, thus reducing competition forspectrum.

From an environmental perspective, the benefits are largelycaptured by site / tower sharing,.

Some regulators, particularly in emerging markets, consider that RAN

sharing may be a method to bring telecoms access to ruralcommunities and it may even be part of a USO programme.

Shared Backhaul: A New Opportunity

The growth in mobile data traffic dues to HSPA and in future LTEmeans operators have invest massively in backhaul. Here bigsavings can be had, particularly if fibre is deployed . This can lead tohuge savings particularly in difficult geographies. Indonesia and the

Philippines are prime examples.

1

Network Sharing


In emerging markets

RAN sharing may

become a political

imperative in order

to deliver universalservice objectives


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RAN and Core network sharing, a form of consolidation

Core Network Sharing

Core network sharing is as yet uncommon and beyond the sharing ofthe backbone it is likely to remain marginal.

There are two main variants of core network shar ing.

Sharing the transmission ring only. Mainly applicable when an

operator has spare capacity on the transmission ring

Sharing network logical elements such as VAS platforms or theOMC.

Consolidation by Stealth

If the RAN and core network are shared, the definition between whatconstitutes an MNO and an MVNO is blurred. If two MNOs pool thevast majority of network assets in a joint venture network operatingcompanies, what remains of the separated MNO looks in fact morelike an MVNO.

Under this scenario we have in effect consolidation at the network

level of the value chain. Given than in some markets, notably inEurope, consolidation in already happening, core network sharingmay be a mechanism whereby consolidation can be introduced atwholesale (network) level, while keeping retail operations separate.

Deployment Examples

Core network sharing is in the early stages, and a mainstreamapproach is yet to emerge.

In the US, Cingular and AT&T shared core GPRS network beforethey became one company.

Current MVNO models (large in Sweden and Netherlands) could be

considered a variant of core network sharing, depending on thespecifics of each implementation.

Regulatory Aspects

Regulators tend to be more restrictive in order to maintain operatorindependence and competitiveness. For example, MSC sharing isprohibited in Norway.

1

Network Sharing


If everything,

including the RAN

and core network is

shared this may be

viewed asconsolidation by

stealth

Core Transmission Ring Sharing

SharedTrans-mission

Ring

Netw.AMSC

Netw.AHLR

Netw.ASGSNGGSN

Netw.AOMC

Netw.BMSC

Netw.BHLR

Netw.BSGSNGGSN

Netw.BOMC

RANNetwork A

RANNetwork B

VASNetwork A

VASNetwork B

Shared Ring and Core Netw. Elements

SharedTrans-mission

Ring

Netw.AMSC

Netw.AHLR

Netw.ASGSNGGSN

SharedOMC

Netw.BMSC

Netw.BHLR

Netw.BSGSNGGSN

RANNetwork A

RANNetwork B

Shared VASPlatform


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An overview of Coleago's process to develop the business case for network sharing,planning network sharing, partner selection and agreeing terms

Coleagos approach to network sharing

1

Network Sharing

2

To receive a full description of the network sharing process map please contact us

N k h i b i l i


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DetermineObjectives and

Understand the Base

Case

StrategicAnalysis

NetworkReadiness

Audit

PartnershipModel

Selection &Partner

Engagement

AssetValuation

DevelopBusiness

Case

DevelopImplementation

Plan

Process map for developing a network sharing business case and implementation plan

Network Sharing

Network sharing business planning process

Developing a

network sharing

business case is the

pre-requisite for

entering into detailednegotiation and

combined analysis

with an identified

network sharing

partner .

The process of

developing a

network sharingbusiness case

involves a number of

go / no-go decision

points to minimise

the commitment of

time and resources

at each stage of the

project.

1 2 3 4 5 6 7

Understand therationale andthe evaluationcriteria to beused to selectthe preferrednetworksharing modeland to evaluatethe network

sharingbusiness case.

Develop anunderstandingof thebusiness asusual businesscase and thefinancialforecasts for

the businesswithout networksharing. Werefer to this asthe base case

Network Audit, Strategic Assessment and Business Case Development Implementation

Understandwhether thenetwork cansupport theselectedsharing option.

Estimate theinvestmentrequired to

make theclients networkready forsharing.

Technical go /no-go decisionpoint

Review thestrategic, market& commercialdrivers fornetwork sharingand determinewhether there isa strategicrationale forsharing.

Evaluate thesharing modeloptions andidentify the beststrategic fit andassess whetherpotentialpartners wouldconsider sharingand develop a

short list ofoperators.

Strategic go / no-go decision point

Engage with theshort listedpotentialpartners toassess theirinterest innetwork sharing.

Discuss theclients preferred

sharing modeland agree withthe interestedparties thepartnershipmodel which willform the basisfor developingthe businesscase.

Partner go / no-go decision point

Where a newnetwork sharingentity is to beestablished thevalue of theassets to betransferred mustbe calculated.

In the case of

roaming basedagreements or aform of leasingmodel anestimate mustbe made of therevenuepotential to begenerated fromsharing and anysharing costs

Develop afinancial modelfor theidentifiednetworksharing modeland calculatethe value ofnetworksharing to the

client based onthe NPV ofbusiness withand without(base case)networksharing.

Commercial go/ no-godecision point

Develop animplementationplan that willsupport a detailedopportunityassessment e.g.preparation ofasset register,creation of draftterm sheet / LOIby describingdeal breakingprinciples (e.g.,ownershipstructure, pricing)of chosenscenario(s) ,develop partnerengagementtactics, internalcommunication

strategy andtimeline andproject managethe combinedanalysis.

1


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A specialist telecoms management consulting firm

About Coleago Consulting

1

Network Sharing

3

Coleago Consulting


17/34


A leading boutique telecoms consulting and training firm

Operators and regulators

Telecoms operators around the world trust Coleago toprovide insight and advice on key strategic and commercialissues through our broad range of consulting and trainingservices.

Experience based consulting approachWe do not use inexperienced associates or analysts all ourconsultants have a minimum of 10 years experience andmost have over 15 years, often at board level in operationalbusinesses. Our insight and advice is therefore based onpractical experience and proven processes andmethodologies developed over many years. Clients can beconfident that their project will be delivered by Partner andSenior Manager level consultants from start to finish and oursolutions and recommendations will be credible, relevant,realistic and practical.

Developed and developing market experience

Coleago has worked with clients in developed markets andalso in some of the most challenging emerging marketsincluding the Yemen and the Sudan and we have launchedand operated GSM businesses in countries such as Algeria.

Small, effective teams

Our consultants are highly experienced, multi-skilled andhave extensive project management experience. This allowsColeago to deploy smaller teams as we do not require thehierarchy of traditional consultancies to manage large teams

of juniors. Clients find our small teams easier to work withand integrate into their own project teams.

Exceptional vale

By eliminating many of the overheads of traditional firms weare able to offer end-to-end partner level consulting at feerates that provide exceptional value.

1

www.coleago.com

Coleago Consulting

Based in the UK

Coleago provides

consulting and

training services to

global and regionaltelecoms, media and

technology players

Advice covering a broad range of technologies

We have advised clients on wireless, fixed, cable, satellite and fibre basedtechnologies. We have specialist expertise in spectrum valuations andspectrum auctions have participated in more than 50 awards since 1994.

Media and technology experience

We have developed strategies and business plans for media companies, TVchannels and web based businesses as well as technology companies.

Innovative training services

Coleago has developed a range of training and management developmentprogrammes, including a War Game (business simulation)

Junior Consultant

Senior Consultant

Manager

SeniorManagers

Partner

Analyst

TraditionalConsulting Firm

Model

Coleago Consulting


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We provide a broad range of consulting services

1

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Coleago Consulting

We specialise in

telecoms business

analysis, planning

and modelling to

ensure that ouradvice and

recommendations

deliver increased

shareholder value

Strategy & Business

Planning

Marketing & CustomerManagement

Regulation &Interconnect

Business

Transformation &Cost Reduction

Due Diligence

Improving NetworkPerformance

Spectrum and

Licences

Digital Content &Media

Fund Raising

Strategy Development,Marketing Strategy

War Gaming Business Planning Business Modelling

Spectrum StrategySpectrum Valuation for

Auctions

Spectrum Auction Bid

StrategyLicence Applications

Market Forecasting &Market Planning

Market Segmentation &Customer Insight

Customer Life TimeManagement

Improving CustomerCare

Commercial DueDiligence

Technical Due Diligence

Cost Reduction Restructuring Turnaround

Network Audit Network Sharing Outsourcing

Interconnect CostModelling

InterconnectAgreements and RIO

Regulatory Strategy Accounting Separation

TV Business Planning Digital Media StrategyDigital ContentMonetisation

InformationMemorandum

Equity Fund Raising Debt Fund Raising

Coleago Consulting


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We offer an innovative suite of training, development and coaching services

Specialist Telecoms Trainers

Our trainers are first and foremost telecoms industryexperts who are able to gain the respect ofprogramme participants. They are also outstandingtrainers with a passion for their subjects.

Telecoms FocusOur programmes are developed exclusively for thetelecoms sector and use real life telecoms casestudies, examples and benchmarks throughout.

Bespoke Solutions

We develop bespoke solutions for clients oftenutilising information about their specific markets toillustrate key points.

Tailored Deliver

We provide pre-course questionnaires and holdtelephone interviews with every participant to ensurethat each and every delivery contains the rightcontent delivered at the appropriate level.

Innovative Programmes

We use simulation tools, role plays and challengingcase studies to provide an entertaining andrewarding learning experience.

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Our War Game process is the most realistic

simulation of a telecoms market currently beingoffered and is the closest thing to running atelecoms business after actually running a telecomsbusiness!

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Coleago Consulting

Our telecoms War

Game is a unique

and exceptional

management

developmentplatform and our

Dragons Apprentice

offers a new

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building

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War Gaming & TheDragons Apprentice &

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InvestmentAppraisal &

Excel Modelling

Coleago Consulting


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Coleago has delivered assignments for global operators and smaller players

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Coleago Consulting

Our clients include

fixed and mobile

operators, MVNOs,

equipment vendors,

regulators andcontent providers

ComRegIreland

P4 Poland

GibraltarRegulatoryAuthority

VIP-NetGSM d.o.oCroatia

Kuwait

Sudan

Coleago Consulting
http://www.cincinnatibell.com/http://www.ideacellular.com/index.htmhttp://www.nedjma.dz/watweb/home.do;jsessionid=552D0EEDFB53F31137B351183230985C.fm01http://www.answers.com/topic/warid-logo-jpghttp://www.shoprogers.com/default.asp?shopperID=6WTTCBCD0U509HLTN5N2H9GX9S4JE0F4http://www.vodafone.co.nz/


21/34


Global outlook

2

www.coleago.com

We have delivered

projects on every

continent of the

globe

Coleago Consulting

Austria, Belgium, Bulgaria, Czech Republic, Croatia,Denmark, Finland, France, Germany, Ireland, Italy,Luxembourg, Malta, Netherlands, Norway, Poland,Spain, Sweden, Switzerland, UK

Canada, USA

Algeria, Tunisia, Egypt, Sudan,Madagascar, Morocco, South

AfricaArgentina, Venezuela,Brazil

Caribbean, El Salvador,Haiti, Mexico, Panama

Australia, China, Hong Kong,India, Indonesia, Iran, Japan,Korea, Malaysia, Pakistan,Philippines, Thailand, Taiwan,Singapore

Kuwait, Saudi Arabia, Yemen,Oman

Coleago Consulting


22/34


Coleagos consultants lead and shape the industry

2

www.coleago.com

g g

Coleago is regularly

asked to speak at

key telecoms

conferences around

the world as well assitting on

governmental

working groups and

industry bodies that

shape the future of

the industry

Business texts written by the founders of Coleago

Guide to Business Planning named Outstanding AcademicTitle 2009

The Guide to Business Planning, a book authored by GrahamFriend and Stefan Zehle the Directors of Coleago, which recently

appeared in its 2nd edition was named as one of the "OutstandingAcademic Titles, 2009 (Business and Economics)" by Choice, theUS academic review journal.

Source: Choice, 5th of January 2010www.lib.uwo.ca/news/business/2009/12/23/outstandingacademictitles2009businesseconomics.html

Participating in shaping the telecoms industry

Coleagos consultants are actively involved in telecomsindustry events. For example, Stefan Zehle, Coleago CEO,spoke at over 20 conferences and forums, and most recently

at the GSMA Spectrum Workshop in London (June 2010). Coleago consultants are cited in the press world-wide

including Total Telecom, Wall Street Journal, Wall StreetJournal Asia, Deutsche Welle, Business & Economy India,Financial Times, New York Times, BBC News.


23/34

copyright Coleago 2010 2

www.coleago.com

Stefan Zehle, MBA

Tel: +44 7974 356 258

[email protected]

CEO, Coleago Consulting Ltd

Con

tact

Graham Friend, MA

Tel: +41 79 855 1354

[email protected]

Managing Director, Coleago Consulting Ltd

Further information: www.coleago.com

Scott McKenzie, ME, MBA

Tel: +44 7825 294 576

[email protected]

Director, Coleago Consulting Ltd


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Network sharing examples

2

Network Sharing

4

Network Sharing Examples


25/34


Network Sharing

3 UK and T-Mobile (UK) 3G network sharing agreement in the UK

Market Context

T-Mobile (UK), originally the 3rd entrant in the UK, largely with 1800MHz frequencies had lost market share and declined to be the 4 th

player in a 5 player market with a share of 16%.

3 UK, is a pure 3G company with access to 2.1 GHz frequenciesonly. It is the 5th player in the UK with a low market share. Thecompany had a market share of only 6% and is not trading profitablyat EBITDA level.

Scope and Nature of Agreement

T-Mobile and 3 formed a 50:50 joint venture company "MobileBroadband Network Ltd with the mission to build and operate a joint3G network. The agreement between the companies included:

A few additional towers to be jointly built within 2 years to reach13,000 base stations and population coverage targets

3G RAN sharing (sites, Node Bs and RNCs, excl. core,frequencies and 2G)

Objective to profit from consolidation and joint build-up (Phase 1,2008)

Significant increase of 3G coverage in rural and urban areas,including indoor coverage (Phase 2, 2009)

HSDPA (Phase 3, 2010)

Rationale

Speed up introduction of new high-speed mobile broadbandservices

Achieve 98% coverage, 18% more than required under the terms

of the 3G license.

5,000 sites decommissioned by T-Mobile out of a total of 18,000,i.e. a saving of 28%.

Generate an estimated UK 2 bn capex and opex savings overten years.

Increase quality of service.

T-Mobile and 3

formed a 50:50 joint

Venture "Mobile

Broadband Network

Ltd" to reduce thecost of rolling out

and operating mobile

broadband

MBNL manages and delivers the combined 3G access networks ofthe two companies. This collaboration will lead to almost complete

population coverage for 3G services across Britain by the end of2008 with significant improvement to dense urban in-buildingcoverage in 2009. As the world's largest known active 3G network

consolidation agreement, this has significantly increased both

operators' 3G network quality and coverage, accelerating theprovision of new high-speed mobile broadband services anddelivering substantial cost savings as well as environmental benefitsby de-commissioning 5000 radio base station sites.

Source: "Mobile Broadband Network Ltd

.

JV

20092007

Combined Coverage of T-Mobile and 3 UK 3G Network

http://www.three.co.uk/Home


26/34


Network Sharing

Several network sharing agreement following spectrum auction in Canada

Market Context

In July 2008 Canada concluded an auction for Advanced WirelessServices (AWS) spectrum in the 2.1 GHz range, i.e. spectrum todeploy mobile broadband services.

Canada has three major national players, Rogers, Telus and Bell, . Atthe time of the auction Rogers was the only GSM/HSPA operator (theothers operated CDMA/EVDO networks). The auction was based ondifferent regional tiers and included spectrum blocks reserved fornew entrants and regional incumbents such as SaskTel and MTS. Inaddition the auction rules mandated cost based national roaming.

For Bell and Telus the additional spectrum also provided theopportunity to migrate their networks from CDMA/EVDO toGSM/HSPA.

Network Sharing Agreements

Following the auction several network sharing deals were agreedbetween the national and regional operators:

SaskTel operating in Saskatchewan reached an agreement toshare HSPA mobile network infrastructure with nationwideoperator Bell. For Bell the agreement increased plannedpopulation coverage from 93% to 94%, while for the regionalSaskTel the main benefit was nationwide coverage via Bellsnetwork. This new network sharing agreement with SaskTelallows us to quickly and cost-effectively extend the country'slargest and fastest wireless network to even more Canadians.Wade Oosterman, President of Bell Mobility

MTS operating a mobile network in Manitoba and a nationalbusiness telecoms company agreed to deploy its HSPA network

jointly with Rogers Wireless. MTS and Rogers will deploy a HSPAnetwork in the regional area where MTS already has a presence,i.e. Manitoba. In addition, MTS will have access to Rogersnational network as a roaming partner, thus being able to competenationwide.

Following the AWS

spectrum auction in

Canada in 2008,

during 2009 several

operators agreedjoint HSPA network

builds

Bell and Telus also agreed to cooperate on sharing the cost ofrolling out their HSPA networks. A key difference between the twooperators is that Bell only obtained 10 MHz of new spectrumwhereas Telus acquired 20 MHz.

In addition to the network sharing agreements, operators enteredinto site sharing agreements. For example, DAVE, another new

entrant with spectrum in ten of Canadas largest urban areascame to a colocation agreement with Bell. By using existinginfrastructure built by Bell, we can greatly quicken our time tomarket. Dave Dobbin, president of DAVE Wireless

National Mobile Operators Regional Mobile Operators

http://www.shoprogers.com/default.asp?shopperID=6WTTCBCD0U509HLTN5N2H9GX9S4JE0F4


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Network Sharing

Vodafone and Orange rural RAN sharing agreement in Spain (1)

Regional 3G RAN Sharing

The deal in Spain was agreed in 2007. At the time Vodafone had a30% market share and Orange a 22% market share. Both arecompeting against the dominant fixed and mobile incumbentTelefonica.

At the time of the 3G auction such deal was prohibited, but latergained regulatory acceptance due to economic feasibility andenvironmental benefits.

The agreement covers 3G RAN sharing on regional basis to covernew rural areas to fulfill regulatory coverage obligations and possiblego beyond coverage obligations where there is a business case.Large cities are excluded from the agreement which focuses on smalltowns with less than 25,000 inhabitants. As of mid 2009, 2,600 NodeBs were shared and this is projected to increase to 5,000 by 2011.

Both MNOs expect 40% fewer base stations compared to individualdeployment Orange announced the following benefits:

200mn capex/opex savings expected over 5 years 75mn in cumulated capex/opex savings realised by March 2009

Reduced negative environmental impact

Date: 2007

Vodafone and

Orange in Spain

Covered by Agreement Out of scope

Region A

Node B

Radiocontroller

Region B

Node B

Radiocontroller

Region A

Region B

Products andservices

Vodafone core network

Orange core network

Products andservices

V d f d O l RAN h i t i S i (2)

http://www.vodafone.co.nz/


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Network Sharing

Vodafone and Orange rural RAN sharing agreement in Spain (2)

Large Savings Realised

In March 2009, Orange showed that the RAN sharing agreementdelivered what was expected. By March 2009 50% of roll-out wascompleted and 75 million of cumulated savings had been achieved.As a result Orange announced that is was in the process ofexamining an extension of the arrangement to other countries.

The agreement

delivered the savings

that were envisaged.

Source: Orange presentation, March 4 & 5, 2009

The Deal in Spain did no Block Subsequent Deal

In March 2009 Vodafone and Telefonica announced a far reachingmulti-country site sharing agreement which also covers Spain.Vodafone insisted that will have no impact on the existing networksharing agreement with Orange.

In Spain Telefonica also has a parallel agreement with Yoigo, seenext page.

T l f i d Y i ti l i d it h i t i S i

http://www.vodafone.co.nz/


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Network Sharing

Telefonica and Yoigo national roaming and site sharing agreement in Spain

Market Context

Yoigo, the new entrant in Spain found an agreement with thedominant national fixed and mobile incumbent, Telefonica, forroaming and site sharing.

Telefonica was the leader in the Spanish mobile market whereasYoigo was very small. Yoigo was established Dec. 2006 byTeliaSonera. The two network were huge different in scale:

Telefonica had 99% population coverage and has 14,000 sites.

Yoigo had only 42% population coverage.

By European standards Spain is a large country with a relatively lowpopulation density which makes it prohibitively expensive for a newentrant to reach coverage parity. National roaming is the only way inwhich a new entrants can compete effectively.

Scope of Agreement

The agreement between Telefonica and Yoigo covered:

2G and 3G networks 5 years nationwide agreement, for rural and urban coverage

Tower / site sharing agreement (passive elements only), accessto entire network

Rationale

For Telefonica the driver was to find a new source of revenue.There was also regulatory pressure to give access to the newentrant.

For Yoigo the deal delivered increased network coverage withlimited capex and also helped to resolved the difficulties to receive

authorisations to build new masts.

For Yoigo and new

entrant, the site

sharing deal not only

reduced capex but

solved the problemof not getting site

build permits

A multi country site sharing agreement that may evolve further

http://images.google.ch/imgres?imgurl=http://blog.eun.org/SID2007/upload/Telefonica_logo.png&imgrefurl=http://blog.eun.org/SID2007/2007/02/&usg=__S5QKRT3fr5RrlbAPjUSWdFu39tQ=&h=281&w=555&sz=11&hl=fr&start=3&um=1&tbnid=iwIZTyhoxyV8AM:&tbnh=67&tbnw=133&prev=/images?q=telefonica&um=1&hl=fr&sa=N


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Network Sharing

A multi-country site sharing agreement that may evolve further

Market Context

Telefonica O2 and Vodafone are two major mobile operators with asignificant footprint in Europe. They are relatively strong operators ineach of their markets.

Scope and Objectives of the Agreement

The agreement is a site sharing agreement rather than a RANsharing agreement. The operators will share sites, passiveequipment including masts, and power supply, but will not share theirradio equipment. The agreement covers Britain, Germany, Irelandand Spain and may be extended to the Czech Republic.

The objectives of the agreement are:

Offer enhanced quality of service levels within the networkfootprint to improve customers mobile experience as well assupport the delivery of services such as mobile broadband to agreater number of customers across a wider coverage area .

Reduce the environmental impact of the network by lowering thenumber of sites required by each company, includingconsolidation of sites.

Jointly build new sites where opportunities exist .

Reduce network operating costs. Vodafone mentioned that it cansave up to 10% of network operating costs through passivesharing deals such as the one agreed with Telefonica.

"It's a real

transformational

deal,"Michel Combes,CEO, Vodafone Europe

"The currenteconomic situation

was a catalyst.Matthew Key, CEO,

Telefonica Europe,

March 2009

The details of the agreement vary for each country:

Germany: Both companies to share existing 2G and 3G sites.Shared masts can also be used for microwave backhaul.

Ireland: Both companies to open all network sites for sharing bythe other party. New build will also be conducted jointly where roll-out plans are aligned.

Spain: Both companies to extend existing site share agreementfrom 2007, which includes the shared usage of power, cabinetsand mast. To date 2,200 sites are shared under this agreement.During 2009 and 2010 additional sites will be included.

UK: Both companies to focus on joint build of new sites andconsolidation of existing 2G and 3G sites.

Evolution of the Agreement

The agreement as is simply amounts to site sharing. The benefitsthat this delivers are significant, but further benefits could beachieved. The partners announced that as part of the collaboration,Telefnica and Vodafone are actively exploring opportunities tocooperate in related areas such as the provision of transmissionservices.

Share transmission could deliver substantial savings in the context ofrolling out mobile broadband coverage.

.

Source: Company announcements

Australia: Network sharing did not block subsequent consolidation between unrelated parties

http://www.vodafone.co.nz/http://images.google.ch/imgres?imgurl=http://blog.eun.org/SID2007/upload/Telefonica_logo.png&imgrefurl=http://blog.eun.org/SID2007/2007/02/&usg=__S5QKRT3fr5RrlbAPjUSWdFu39tQ=&h=281&w=555&sz=11&hl=fr&start=3&um=1&tbnid=iwIZTyhoxyV8AM:&tbnh=67&tbnw=133&prev=/images?q=telefonica&um=1&hl=fr&sa=N


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Network Sharing

Australia: Network sharing did not block subsequent consolidation between unrelated parties

Market Context

Australia is a large country with an extremely low population densitywhere access to the 800 / 900 MHz frequencies is essential tocompete because building geographic coverage is costly. It was alsodifficult to achieve scale economies because Australia has apopulation of only 21 million and had four licensed operators.

RAN Sharing Agreements

Australias four mobile operators RAN sharing agreements 2004, onebetween Optus and Vodafone, and the other between Telstra and 3.The Australian incumbents, Telstra and Optus, had a significantcoverage advantage, but accepted the deals because of theexpertise and procurement scale of Vodafone and 3.

In 2004 Telstra and 3 formed a JV to jointly own and operate 3sexisting 3G radio access network and fund future networkdevelopment. 3s radio access network was the core asset of theJV. In return for the 50 per cent ownership of the asset, Telstra

paid Hutchison $450 million. Also in 2004, Optus and Vodafone agreed to share a single set of

3G antennas and feeders and co-locate the two carriers' 3G basestations in a single equipment shelter. This type of site wasdeployed in the inner areas of Sydney and Melbourne. Sharednetwork sites use a single set of 3G antennas and feeders andshare a 3G base station. Optus estimated its capex would bereduced by AU$100 million in the first three years, compared to a"do it alone" approach of rolling out 3G. Operating expenditure formaintenance, operations and site leases was expected to bereduced by approximately AU$10 million per year.

Experience from

Australia shows that

a RAN sharing deal

does not block a

subsequent merger

with a competing

operator

Subsequent Merger Between Vodafone and 3

In February 2009 Vodafone and 3 agreed to merge the operations inAustralia. A key ingredient of the synergies to be achieved is theroaming deal between 3 and Telstra in the 800/900 MHz band where"3" is roaming on Telstra. However Vodafone pursues build-out and3s customers will be able to use Vodafones network. As a result

Vodafone and "3" secure long-term competitive position in thisrelatively small (from a population perspective) market.

The JVs are reported to keep running despite merger with "mid-termadjustments to realise network savings" (Vodafone and "3").

2004RAN Sharing JV

2009Vodafone & 3 Merger

Three way tower sharing deal in India

http://www.optus.com.au/http://images.google.de/imgres?imgurl=http://www.techztalk.com/techwebsite/system/files/images/Telstra_logo.jpg&imgrefurl=http://www.techztalk.com/techwebsite/12-05-08-telstra-launches-21mbps-3g-network-in-australia&usg=__n_AYTRlpR_YAhC4S41rfs554eiI=&h=225&w=320&sz=7&hl=de&start=1&sig2=YQ9PG-h8N6SlpeqPc5ft6g&tbnid=jz_ERTf_93qK_M:&tbnh=83&tbnw=118&ei=XojcSd_GBceN_Qaw4vD0DA&prev=/images?q=Telstra+Logo&hl=de&rlz=1T4ADBF_deDE270DE270&sa=N&um=1&um=1http://images.google.com/imgres?imgurl=http://www.mobile.ie/wp-content/uploads/2008/11/vodafone-logo-vbig.jpg&imgrefurl=http://www.mobile.ie/category/vodafone/&usg=__RkNFgNmcZ00znn5yrUgD1MGuLxA=&h=252&w=314&sz=32&hl=en&start=1&tbnid=XYCZzsf94HzizM:&tbnh=94&tbnw=117&prev=/images?q=Vodafone+logo&gbv=1&hl=enhttp://www.three.co.uk/Homehttp://www.optus.com.au/http://images.google.de/imgres?imgurl=http://www.techztalk.com/techwebsite/system/files/images/Telstra_logo.jpg&imgrefurl=http://www.techztalk.com/techwebsite/12-05-08-telstra-launches-21mbps-3g-network-in-australia&usg=__n_AYTRlpR_YAhC4S41rfs554eiI=&h=225&w=320&sz=7&hl=de&start=1&sig2=YQ9PG-h8N6SlpeqPc5ft6g&tbnid=jz_ERTf_93qK_M:&tbnh=83&tbnw=118&ei=XojcSd_GBceN_Qaw4vD0DA&prev=/images?q=Telstra+Logo&hl=de&rlz=1T4ADBF_deDE270DE270&sa=N&um=1&um=1http://images.google.com/imgres?imgurl=http://www.mobile.ie/wp-content/uploads/2008/11/vodafone-logo-vbig.jpg&imgrefurl=http://www.mobile.ie/category/vodafone/&usg=__RkNFgNmcZ00znn5yrUgD1MGuLxA=&h=252&w=314&sz=32&hl=en&start=1&tbnid=XYCZzsf94HzizM:&tbnh=94&tbnw=117&prev=/images?q=Vodafone+logo&gbv=1&hl=enhttp://www.three.co.uk/Home


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Network Sharing

Three way tower sharing deal in India

Market Context

India is a vast country with a rapidly growing mobile market. Thegovernment is keep to foster mobile penetration growth and bringtelecommunications to rural communities at price point acceptable forIndian consumers. The parties to the agreement were:

Vodafone Essar, Vodafones India operation has a market share18% with 62.6 million customers as of January 09, operating in16 out of Indias 22 circles (licence regions).

Bharti Airtel was is one of the leading operators in India with amarket share 23%, amounting to 87.4 million customers as ofJanuary 09.

Aditya Birla Telecom Ltd operating under the Idea brand is asmaller player present in fewer circles.


In December 2007 an agreement was made among the threeoperators to put 70,00 mast sites into a joint venture while retaining

own transmission equipment. A joint venture company IndusTowers was established with potential future stock exchange listingin mind.

At the time of the making the agreement it was announced that50,000 additional towers will be built over next 2 to 3 years. By May2009 Indus Towers had already 95,000 sites operational. It claims tobe the worlds largest tower company.

Rationale

For Vodafone, Airtel and Idea the JV will deliver:

Reduced capex requirement for increasing coverage

Accelerate wireless coverage across the country, particularly inrural areas

Reduced network opex, notably in network maintenance

In India a three way

Joint tower site

venture was

established as a

separate company

with potential future

stock exchange

listing in mind.

Indus Towers

Indus Towers Limited provides Shared Telecom Infrastructureservices to all telecom operators in the wireless space and other

wireless service providers such as broadcasters and broadbandservice providers. Our commitment towards continuous innovation

endeavours, optimization of future tower rollouts, enhanced

operational efficiencies - leading to substantial cost savings for itscustomers.Source: Indus Towers

Indus Towers does not only provide site services to its shareholdersbut also counts other Indian telecoms operators among its clients,including:

Tata Teleservices

Reliance Communications BSNL

42%

42%

16%

Two partner sharing deal in Pakistan grows to three partners

http://airtel.in/wps/wcm/connect/airtel.in/Airtel.In/Home/http://www.industowers.com/http://images.google.com/imgres?imgurl=http://www.mobile.ie/wp-content/uploads/2008/11/vodafone-logo-vbig.jpg&imgrefurl=http://www.mobile.ie/category/vodafone/&usg=__RkNFgNmcZ00znn5yrUgD1MGuLxA=&h=252&w=314&sz=32&hl=en&start=1&tbnid=XYCZzsf94HzizM:&tbnh=94&tbnw=117&prev=/images?q=Vodafone+logo&gbv=1&hl=en


33/34


Network Sharing

Two partner sharing deal in Pakistan grows to three partners

Market Context

Ufone was established in 2001 and is backed by Etisalat. Telenorwas set up in 2005 by the Norwegian Telenor Group. With apopulation coverage of 21% in 2005, Telenor trailed ufone in terms ofcoverage by around 10% points in 2005.


In 2006 an agreement was made between Ufone and Telenor for anationwide site sharing agreement with a duration of 10 years. Themain aims were:

Expand coverage of highways and sparsely populated towns

Alleviate network bottlenecks in key urban centers

Rationale

The deal is expected to deliver 50% CAPEX saving (ufone estimates)in a market that is heading for maturity. In order to reach moremarginal populations the cost of coverage has to be brought down.

Subsequent Development

Warid later joined the agreement. However, Mobitel the leadingmobile operator did not join.

In Pakistan a two

way deal was

extended to include

a 3rd operator

Zain and Mobily in Saudi Arabia: National roaming and site sharing

http://www.answers.com/topic/warid-logo-jpghttp://images.google.ch/imgres?imgurl=http://www.telenor.co.yu/media/TelenorSrbija/media/Telenor_horizontalni.jpg&imgrefurl=http://www.telenor.co.yu/?section=about&page=528&usg=__7-vgAyvZpTvLmTTO6_QkC7oVq60=&h=290&w=650&sz=88&hl=fr&start=2&um=1&tbnid=AqryR8ONxhr0eM:&tbnh=61&tbnw=137&prev=/images?q=telenor&um=1&hl=fr


34/34


Network Sharing

Zain and Mobily in Saudi Arabia: National roaming and site sharing

Market Context

Mobily had launched in 2004 (35% owned by Etisalat Group) and hada market share of around 40%. Mobily had 95% of population. ZainKSA (25% owned by Zain Group) acquired its licence in April 2007. Itwas looking for a national roaming agreement and a site sharingagreement to roll-out faster. An agreement was reached in

November 2007.

Scope of Agreement

The agreement between Zain and Mobily covered:

Passive sharing of towers in areas of overlapping coverage.

National roaming to complement Zains own network coverage.The national roaming to be reduced progressively as Zains owncoverage will increase over period of 3-5 years.

2G and 3G technology.

Zain and Mobily in

Saudi Arabia: Site

sharing and national

roaming
http://images.google.com/imgres?imgurl=http://upload.wikimedia.org/wikipedia/en/thumb/1/12/Zain_logo.png/125px-Zain_logo.png&imgrefurl=http://www.mobile4arab.com/vb/showthread.php?p=4726341&usg=__t3taEc2di47PSmtnvisLppsrU5o=&h=174&w=125&sz=27&hl=en&start=2&tbnid=Xu58Yt_4s45P-M:&tbnh=100&tbnw=72&prev=/images?q=Zain+logo&gbv=1&hl=en

network sharing overview coleago

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