Telecommunications operators are faced with operational challenges that include theft and vandalization of equipment as well as pressure from authorities to reduce number of towers. These bring to bear the need for operators to explore ways through which the rising operational cost could be reduced, and such options are outsourcing of base transmitter station and collocation of infrastructure.

Telecommunications operators have at different times lamented high operating cost as a major challenge in delivering better quality of service to their subscribers. This brought about the need to seek ways through which the cost will be reduced. One of these options which operators have not wholesomely embraced is Base station outsourcing of some of their businesses to other companies, whose core business it is, and collocation of infrastructure.

BTS outsourcing model involves contracting with another company or person to do a particular function. Almost every organization outsource in some way. Typically, the function being outsourced is considered non-core to the business. An insurance company, for example, might outsource its janitorial and landscaping operations to firms that specialize in those types of work since they are not related to insurance or strategic to the business. Just like in other industries operations of telecommunications service providers could as well be outsourced, Global System for Mobile communications (GSM) and Code Division Multiple Access (CDMA) operators can outsource a lot of their operations such as customer care, data hosting, base station management, sales outlets among others. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers.

Although outsourcing has been around as long as work specialization has existed, in recent history, companies began employing the outsourcing model to carry out narrow functions, such as payroll, billing and data entry. Those processes could be done more efficiently, and therefore more cost-effectively, by other companies with specialized tools and facilities and specially trained personnel.

Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes, such as benefits management. But some organizations outsource whole operations. The most common forms are information technology outsourcing (ITO) and business process outsourcing (BPO).

Business process outsourcing encompasses call center outsourcing, human resources outsourcing (HRO), finance and accounting outsourcing, and claims processing outsourcing. These outsourcing deals involve multi-year contracts that can run into hundreds of millions of dollars. Frequently, the people performing the work internally for the client firm are transferred and become employees for the service provider.

Collocation

It is a fact that up till this moment, when most of the advanced Countries of the World have put the issue behind them, government in many African Countries are still working on the roll out of basic infrastructure, including those of information and communications Technology. It is a common site to see telecoms operators running parallel infrastructures within the same location.

But according to some industry analysts, sharing of such infrastructures could have reduced the cost of operation, as well as duplications and wasting of scarce resources. Apart from this negative impact which such activities have on the environment, it will also significantly increase the efficiency of telecommunication supply in an economy.

He same is true in the case of sharing building space to co-locate operator’ cable and radio transmission facilities and related equipment. Availability of infrastructure sharing and collocation can significantly decrease barriers to competitive entry. The acquisition of right of way and other permits require building pole lines or towers dig trenches or install ducts and conduits can be time consuming and expensive but can be avoided through collocation of infrastructures.

In some Countries, only Government, entities, such as the incumbent operator, has clear legal authority to obtain ‘right of way’ occupy public property or expropriate private property. In this case, sharing of infrastructures and collocation can reduce cost of the new entrant, and at the same time provide additional revenues to incumbents.

Some regulators require incumbents to permit infrastructure sharing and collocation of a new operator’s transmission facilities in their exchanges. Other operators, including new entrants, are frequently required to cooperate as well, at least in the sharing of infrastructure that is seen to be environmentally degrading, such as towers. In some countries, third parties that own support infrastructure, such as electrical power utilities, are also encouraged to participate in sharing arrangements.

Some level of sharing of infrastructure occurs without regulatory intervention. Both sharing parties can benefit from the arrangements. In this case sharing of infrastructure is often seen as a matter to be free negotiation between operators. But in some other countries, incumbents resist sharing their infrastructure. In such markets, regulatory intervention will be required to implement efficient sharing and collocation arrangements.

Collocation Models

According to a top engineer in one of the leading mobile telecoms firms in Nigeria, all part of a mobile network can be shared between two or more network operators. This ranges from passive elements such as sites, towers, buildings and transmission links, through to radio transmission management, up to a common network infrastructure.

The most common and basic level of sharing occurs when two or more mobile operators share sites, with each putting up their own radio masts and installing their own equipment site sharing.

Usually, the space on masts and antennae are also shared. Partners that share sites may share all site related infrastructure which includes ownership right or right to-use of the site building or shelter, tower or masts, the power supply and battery backup, cabling and antennas as well as transmission equipment.

Site sharing is suitable for densely populated area with limited availability and expensive sites such as underground subway tunnel as well as for rural areas with their associated high cost for transmission and power. Regulators often promote site sharing in order to allow new operators to build their networks more easily by re-using existing sites.

It is interesting to note that mast and antennae sharing have the backing of some environmental groups as it reduces the impact they have on views, particularly in rural areas.

Beyond the site sharing level, the base station equipment, which manages the transmission of signals over the mobile network, can also be shared. In such scenario, each operation deploys its frequency, cells control and network management, while they share facilities such as Radio Base Station (RBS), Radio Network Controller (RNC) and transmission.

Mobile virtual Network Operator (MVNO) is a good model of collocation. One element of this arrangement is the fact that the MVNO does not have a mobile license and uses either parts of or the entire infrastructure of another operator.

Essentially it involves an operator that does not own or control radio spectrum or associated radio infrastructure but does own and control its own subscriber base with the freedom to set tariffs and to provide enhanced value added services under its own brand. Such arrangements can lead to increased service-based competition while also benefiting the operator that owns the infrastructure.

Benefits

There are many reasons that companies outsource various jobs, but the most prominent advantage seems to be the fact that it often saves money. Many of the companies that provide outsourcing services are able to do the work for considerably less money, as they don’t have to provide benefits to their workers, and have fewer overhead expenses to worry about.

Telecommunications operators are gradually embracing collocation which has provided an opportunity for some companies to explore to manage cell sites for operators’ collocated Base Transmitter Stations. Industry watchers believe that if operators collocate their infrastructure it will help them reduce cost of duplicating such infrastructure as well as provide opportunity for them to outsource management of collocated sites to other companies as is been witness with what IHS model. IHS is BTS building company, unlike other tower building companies; it has come up with an outsourcing model of managing BTS for operators. The company through Mallam Bashir El-Rufai, who is its chairman, said that, it has found out that management of BTS by operators with the attendant challenges of theft, vandalization of equipment is diversionary to operators’ effort in delivering quality of service. This he said could be addressed by operators outsourcing the management to experts that will solely focus on collocation and managing of BTS for them to reduce cost.

Running of base stations has constituted a very big challenge for Telecom operators in the country. Mallam Bashir El-Rufai, chairman, Infrastructure Hi-tech Services (IHS) said that GSM operators spend an average of $5,000 monthly to run a base stations. This expenditure include, servicing of generators, fuelling, and security among others. He noted that if operators outsource or rent base station it will take off them the problem of vadalization of equipment and theft of generating set among others.

But Collocation has Obstacles

In spite of the benefits of co-sharing of infrastructure, Nigerian telecoms operators are yet to fully avail themselves of the opportunities in the system. There are pockets of co-sharing of infrastructure among operators in Abuja necessitated by the local authority’s implementation of a policy geared towards forcing operators to do just that.

Mr. Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (Alton) said one of the major obstacles to co-sharing of telecommunications infrastructure in the country has to do with the fact that from inception of network roll out in Nigeria, there was no provision for operators to co-share infrastructure.

He added that cp-sharing of infrastructure allows a network operator to put his network performance in the hand of the other operator who owns the infrastructure being shared. To this end, if the operator is involved in any legal issues that may require his network to be shut down as was witnessed in Mobitel and Intercontinental bank, the services of the network operator sharing such facility will also be disrupted.

He noted that some operators lack maintenance culture which could also jeopardize network performance of other operators sharing such infrastructure especially in a situation where there is a breakdown in agreement as a result of maintenance lapses. Adebayo cited example of a tower that collapsed in Victoria Island in Lagos about three weeks ago, arguing that if other operators were sharing such facility with that operator not only that network operator’s service will be disrupted but others sharing it.

Other challenges to co-sharing of infrastructure include, technology differences where some telecommunications operators operate with different frequency that does not encourage sharing, for example the height of Code Divisional Multiple Access (CDMA) towers are higher than that of Global System for Mobite communication (GSM).

Adebayo is therefore of the opinion that in spite of the benefit of co-sharing of infrastructure, operators should not be forced to go into it as such effort will not achieve the desired growth so far enjoyed in the industry.