Electricity pylons can be used for fibre cables. Source: Deloitte
Governments should promote sharing of networks and laying fibre cables with other infrastructure such as roads and power lines if they are to achieve universal access to broadband. Sharing infrastructure not only saves time but also provides massive savings when rolling out telecom networks to meet the growing needs of the public for internet access. As a result, infrastructure sharing not only makes it cost-effective to reach populations in remote areas which are generally cut off from affordable broadband, but also helps drive down prices generally, by fostering greater competition.
“If costs can be shared with other operators, massive savings can be made.”
A study just released by consulting firm Deloitte has shown that the cost of telecom networks can be dramatically reduced if network operators collaborate with each other in deploying fibre optic backbones or masts for wireless broadband. The report points out that even greater savings can be made if other utilities such as roads, rail lines, pipelines and power grids share their infrastructure with network operators. The Deloitte report was commissioned by APC.
APC’s Internet Access Specialist Mike Jensen points out that over 80% of the cost of laying a new fibre backbone is the civil works necessary to trench the cable. “If this cost can be shared with other operators, or for example, if ducts to carry fibre can be placed in roads when they are built, massive savings can be made.”
Similar sharing strategies are also being applied to the towers used by wireless operators. This is probably the area where infrastructure sharing is already relatively advanced, with growing numbers of mobile operators around the world selling off their tower infrastructure to specialist “towercos” who then lease space on the towers to multiple operators. This also reduces the environmental impact created by the unsightly duplication of masts.
Alternatives for smaller network operators
Many governments also set up or license wholesale fibre backbone operators – another mechanism for encouraging infrastructure sharing and competition in the retail sector. This can also help keep dominant operators in check by providing alternatives for smaller network operators to compete on a level footing, which helps increase the number of choices available to the end-user.
To give a rough indication of the potential savings, Jensen draws attention to the Deloitte report, which shows that including a duct in a road project increases the road building cost by only about 1-2%, while eliminating the huge cost of civil works for telecom operators. If the 150,000 km of fibre planned in Africa could use these types of utility infrastructure, the total cost would drop from about USD 3 billion to less than USD 600 million, or only USD 200 million per operator if the backbone is shared between three operators. It is also much cheaper and quicker to lay cable along existing roads or other utilities than to dig independent trenches because rights of way issues have already been dealt with. In urban areas, this has meant that even sewage systems are used to lay fibre. However some utilities have seen the leasing of access to their infrastructure or rights of way as a handy revenue generator and may charge excessive amounts.
Given the limited funds available for operators to extend their networks into more remote areas (where the revenue generating potential is much lower), the report emphasises the need for government policy makers and regulators to ensure that infrastructure sharing is more widely used. The report suggests that governments adopt legislation that requires ducts be included in all new utility infrastructure, and to allow operators to require other telecom and utility operators to share their infrastructure at reasonable prices when requested.
The report, called Unlocking Broadband for All, is based on a global review of infrastructure sharing experiences, along with case studies in 10 countries: Côte d’Ivoire, India, Indonesia, Kenya, Mozambique, Nigeria, the Philippines, South Africa, Thailand and Uganda.
For further information on infrastructure sharing, see:
- Infrastructure sharing project page
- Report: Unlocking broadband for all – Broadband infrastructure sharing policies and strategies in emerging markets
- Twitter: #InfrastructureSharing
Contact:
Mike Jensen, internet access specialist – mike@apc.org / +55-73-9944-9064
Leila Nachawati, communications associate – leila@apc.org