It is clear that 5G networks, if they are to support the new use cases envisaged for them, will require far more infrastructure, from small cell sites to high quality fibre backhaul and fronthaul. This is likely to result in a far greater degree of infrastructure, and even active equipment, sharing than operators (and regulators, in many countries) have been comfortable with in the past.
In South Korea, the Ministry of Science and ICT announced recently that the three mobile operators, and one ISP, SK Broadband, would share the cost of building the infrastructure for a 5G network. This would save them about $938m over a decade, according to local reports, as well as accelerating investment and lowering barriers for the ISP (and, potentially, other operators or partners in future) to offer mobile and multiplay services.
The Ministry said it aimed to avoid the MNOs – SK Telecom, KT and LG UPlus – and SK Broadband making redundant investments. Details of how the investment will be split between the four operators, and any government contribution, are yet to be revealed.
“Our is goal is to lead the fourth industrial revolution and to support the early commercialization of 5G technology,” Jun Sung-bae, a senior ICT ministry official, told news agency Yonhap.
In the wake of 5G demonstrations at the recent Winter Olympics in South Korea, KT plans to launch commercial services for enterprise customers in March 2019, followed by consumer services in the second quarter of the same year. The network will initially be built in Seoul and then expanded to the rest of the country.
Attempts by governments to force shared infrastructure have often collapsed amid political differences and arguments over the sharing of investment and revenues – Russia, Kenya and South Africa are among the casualties, although the Mexican national 4G network appears, so far, to be working effectively. However, Korea is concerned with underlying infrastructure, and so is using its heavy influence over the operators to accelerate a trend that would be likely to happen anyway. As such, it looks closer to China’s government-inspired move to merge the three MNOs’ tower operations to save money and speed up roll-out, rather than a plan to create a common RAN.
5G sharing, in various different forms, is a topic we’ve discussed more than once in these blogs (for example here is one that looks at both spectrum sharing and sharing of the 5G value chain). But infrastructure sharing in particular is one area in which we not only take a strong interest as a consultancy but in which we have a real-world stake, through our involvement in the 5G NORMA project, which itself implies a shared infrastructure set.
And an important lesson we have learned from all of this work is that, even if it is not government-inspired, infrastructure and equipment sharing, however uncomfortable regulators and operators have been about it over the years, may simply prove an economic necessity. How it actually happens, however, is likely to be a lot less simple.