Although there are pockets of sharing of infrastructure among telecommunications operators among Global System for Mobile communications (GSM), operators there is urgent need now for a massive adoption of co-location of infrastructure by them.
Most importantly, with the global economic meltdown which has reduce the ability of over seas financial institution to give support to businesses thereby affecting the ability of those organizations especially equipment manufacturers as the case may be in telecommunications space to supply equipment on credit to operators in developing countries. To this end, there is urgent need for telecom operators in Nigeria to increase adoption of co-location of infrastructure as a way of reducing cost as well as palliative measure in the current economic recession than looking up to government for such.
Nigeria CommunicationsWeek investigations reveal that unlike their GSM counterpart that have gradually adopting co-locations, CDMA operators are yet to consider the option. They are still pursuing the policy of doing it alone as well as battling with the idea of being the first to reach certain subscriber base through expansion without regard to its implication on the already high cost of doing business in the country.
It was reported that a certain CDMA operator, known for this business model lately realized that it lost over N8 million in the last fiscal year as a result of its quest to do it alone and being the first.
More so, there is nothing wrong for a company to be the first to expand to a town but, such company should consider as ways of reducing cost sharing sharable infrastructure with other operators that are there before it, but may not be operating on the same frequency. For instance, there are infrastructure CDMA operators and GSM operations could share these are generating sets, towers, compound among others.
According to a report released recently by a market research firm, Infonetics Research, global service provider capital expenditures (capex) hit a plateau at $298 billion in 2008, marking the end of a five-year investment cycle. This represented a 12.9% increase in capex spending from the previous year, with much of the growth due to currency appreciation against the US dollar, which peaked in July 2008.
The report noted that the first quarter of 2009 was ugly for equipment vendors because service providers were very cautious, pulling back significantly in some areas, particularly TDM and IP voice infrastructure and SONET/SDH optical equipment spending. On the other hand, it was a stellar quarter for large service provider shareholders, as free-cash-flow among service providers is at an all-time high. Overall, service providers around the globe are maintaining clean balance sheets, telco revenue continues to show resilience, and consumers are increasing mobile Internet usage on their iPhones and other smartphones.
Infonetics is now projecting a 2.8% downturn in worldwide carrier capex in 2009, followed by a flat 2010 and a slow return to growth in 2011 with the start of a new investment cycle.
These points to the fact that telecommunications operators should develop tick skin in the face of all these, and in developing tick skin requires effective resource management which co-location is one of them.
In order to meet the increased communications infrastructures sites rollout demand, statutory requirements for infrastructure sharing and harness economic advantages derivable from co-location and sharing telecoms infrastructure, it is important for operators to explore the possibility of site infrastructure co-location with other telecom operators.
In general, co-location is moving or placing things together, and is used to mean the provision of space for a customer’s telecommunications equipment on the service provider’s premises. In the internet world for example, a Web site or an ISP could place its network routers on the premises of the company offering switching services with other ISPs while in the GSM/Telephony world, Operator could decide to share facilities/sites for cost savings reasons. Co-location is sometimes provided by third party company that specializes in collocations.
Benefits of Co-location
Operators can derive savings on Capex and Opex required for site infrastructure build allowing for more efficient utilization of Capex to expand for coverage and capacity.
Scarce capital and management attention can be diverted to key value-creating activities such as customer acquisition, service quality, operational and strategic excellence.
Co-location provides solutions to problems on capital-constrained, high interest rate, high growth environments.
By adopting co-location, there is no need for operators to maintain in-house expertise to build, operate and service site infrastructure.
There is reduced cost to operators under Towers/Equipment lease, on built in Capex costs and Opex costs resulting in increased operating margins.
Addresses regulatory pressure to co-locate and admin costs to operators of managing the co-location process and activity, increased entry speed for new companies.
It reduces environmental hazard caused by having so many sites.
There are two options available to operators for co-location: Operator to operator agreement where an operator will offer one or more operators a space in his location to share some infrastructure.
Third party service provider can provide a site and facilities, for example a Tower for one or more operators to mount their equipments like radios and antennas.
What can be shared through co-location? Shelter Space, Tower or Mast Structures
Cable Ducts, Earthing Protection System, Lighting Protection System, Rack Space, Fence-wall or palisade fencing, Equipment Shelter Plinth, Transmission Link, AC power (public & private source), among others.
Steps required towards co-location
According to Gbenga Adebayo, chief executive officer, Community Network Support Services (CNSS), these steps are, identification of the technical requirements of co-location with a view to strategizing on meeting the requirements, development criteria for achieving a fair, effective and balanced site co-location evaluation and implementation arrangement with other operators.
Others include development of operator’s policy for co-location and provision of framework for accommodating statutory guidelines within the operator’s policy document, and provision of basic information to Operator’s management to enhance management decision making on proposed infrastructure sharing with a view to harnessing economic advantages derivable from the project.
Against these backdrops that Telecom Answers Associate in collaboration with Nigerian Communications Commission (NCC) last week reiterated the imperative of co-location at a co-location forum held in Lagos.
Engr. Ernest Ndukwe, executive vice chairman, NCC, said at the forum that co-location is the next stage of telecommunications revolution in the country, which informed the commission’s licensing of some companies to provide co-location infrastructure.
He said that, if operators co-locate their infrastructure there will be great reduction in cost, proliferation of mast that distorts beauty of the environment among others. He noted that the commission partnering with Lagos State government to destroy all the mast erected by cyber cafés and others that are no longer in use. NCC he said being the foremost telecom regulatory agency in Africa has set-up diverse plans and initiatives that will bring about better service delivery by the operators of which co-location id part of it.
Funke Opeke, speaking on ‘Network Planning Considerations in Telecommunications Co-location’, stressed the need to allow cordial operation among telecom operators such that will unite them in communications and information processes.
She added that financial reliability, service level agreement and maintenance of infrastructure will help co-location.
The time has come for the telecom companies in Nigeria to stop playing the number game of how much infrastructure and sites they own and start looking at ways like co-locating and have agreed shared infrastructure with other operators. Operators should start focusing on network expansion, and increasing coverage using the most economic and efficient means possible to promote rapid growth in the industry and reduce the environmental hazards and other disadvantages caused by having so many individual communications infrastructure.