The Hindu Business Line : Cell sites sharing: Rivals become partners

IN a bid to bring down cost of operation, private cellular operators are embarking on infrastructure sharing in a big way. Already about 50 per cent of the existing mobile cell sites are being shared between competing operators such as Hutch, Airtel, Idea and BPL, across the country.

"Every circle has at least three to four cellular operators on an average offering mobile services across the same area. Therefore, instead of erecting four different towers, operators now prefer renting out space on towers set up by another operator. This saves on cost of putting the towers and enables quicker roll-outs," said a Delhi based cellular operator, 60 per cent of whose network is shared.

According to industry estimates setting up a cell tower costs around Rs 2 crore and each operator needs over 300 towers to cover a city like Delhi. So, if each of the three private GSM-based operators had to set up a tower by themselves, it would have cost around Rs 1,800 crore to cover Delhi.

Apart from costs savings, operators are also saved from the hassle of locating buildings on whose rooftop the tower can be set up. They also save time on acquiring and negotiating with the owner of the building.

"The new trend is that when operators plan out their network footprint they look at areas where a tower of a rival operator exists. If we also want to locate our equipment in the same area then instead of setting up another tower we get into an agreement with the operator who owns the tower," said another cellular operator.

The operator who owns the tower also profits from the arrangement as he gets a fee for sharing the infrastructure.

The results of sharing the infrastructure are already showing. Operators have been able to pull down the network operating cost by 40 per cent over the last one year.

As against an average operating cost of Rs 377 incurred on each subscriber per month in 2000, operators now spend only Rs 62 per subscriber on network.

In 2003, the network cost per subscriber was Rs 104 per month. In fact, according to a study done by PricewaterhouseCoopers, operators now incur lesser cost per subscriber on network than they spend on sales and marketing initiatives.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Cell sites sharing: Rivals become partners

Spice Tele offers no rental plan

IT corridor widening

Infosys promoters, directors offload 5.16 m shares in ADS — Narayana Murthy may net Rs 435 cr

Cordiant centre in Chennai

Sierra bags Malaysian deal

Wind River Systems in pact with Wipro

IBM, TIFR in 5-year pact

Satyam partners MS

Norwest plans to exit Veraz Networks

Debtor days on the rise for bigger firms