News & Insights

Sharing is caring in the towerco sector

9 Dec 2021

towerco

Technology never stands still and one of the drivers of change in the towerco sector has been the increasing adoption of 5G. It’s been spurring innovation not only in the products being developed to support it, but also in the commercial models used to introduce it.

Due to the densification needed for 5G, if the mobile network operators were to roll it out in the same way as 4G, it would be prohibitively expensive. So they are looking at alternative ways to develop the infrastructure to help keep costs down.

Infrastructure sharing

Rather than building all the infrastructure themselves, MNOs are increasingly sharing infrastructure with other MNOs, or sharing infrastructure provided by an independent towerco or neutral host. While the sharing of passive infrastructure has long been popular in the UK, there is more of a movement in recent years towards sharing active infrastructure, such as antennas, which can really help offset the costs of densification.

Sharing infrastructure can bring real benefits to the bottom line. According to a report from EY Parthenon, due to a combination of opex efficiencies, cost of capital savings and higher rates of co-location, a typical point of presence managed by an independent towerco is 46% more efficient than one managed by an MNO.

The same report also argues that greater outsourcing to independent towercos could release an estimated €28b of capital, which MNOs can reinvest in their networks, such as to improve coverage and accelerate 5G rollouts. Since 2018, independent towercos have helped release around €3.5b in capital via acquisition of various tower portfolios from MNOs.

Equipment advances

There are continuing advances and innovations in antenna and active telecoms equipment. These are needed to adapt to the often-competing demands of densification, capacity, loading and power consumption. Some of the developments include extending the range that antennas can transmit, making them smaller and lighter, as well as making changes to incorporate multiple antennas inside the same housing.

Looking to the future

While MNOs are currently focusing more on their macro sites, at some point 5G capacity in high demand areas, such as transport hubs and urban areas, will need increased attention. This is where outdoor small cells can bring benefits to network users. We’re already involved in this area from a 4G perspective with many local authorities across the UK, such as Croydon Council.  In fact, we’ve been pioneering the open access model with many organisations to ensure that areas can benefit from 4G enhancements now and be 5G ready for the future. Of course in-building connectivity, already well underway with 4G, will also need to extend to include 5G.

According to Rethink Technology Research, by 2026 towercos will start to dominate new built infrastructure for small cells and some active networks and less than 15% of sites will be owned by the MNOs. They also believe that neutral hosts will be the dominant model by 2024 and that the UK has a real head start in this space.

As a leading neutral host provider at the forefront of developments in this space, with significant financial backing from leading digital infrastructure firm DigitalBridge, we’re proud to be at the cutting edge of exciting developments in the sector.

Contact us if you’d like to find out more about how Freshwave could help you or your customers.

9 December 2021