CMS: What are BEREC's current views on network sharing?
BEREC: Network sharing is an established feature of many European mobile markets, and where they comply with competition law and subject to the market context, network sharing agreements are beneficial to end-users. Infrastructure sharing, and certainly mobile infrastructure sharing, is an important tool to encourage the roll-out of networks such as 5G. As long as sufficient infrastructure-based competition is maintained, sharing allows cost savings and makes more extensive coverage viable.
As such, BEREC supports the sharing of networks and we believe that it can have many advantages. BEREC’s current thinking on mobile network sharing is set out in our 2019 common position, which describes the criteria that can be considered by NRAs (national regulatory authorities) in assessing mobile infrastructure sharing agreements. However, according to the common position, infrastructure sharing agreements will require evidence-based analysis on a case-by-case basis. This approach gives BEREC comfort that once there are more real-world 5G mobile infrastructure sharing cases, more information can be shared amongst BEREC, NRAs, competition Authorities, competition practitioners and stakeholder advisers.
According to the 2018 European Electronic Communications Code, competent authorities should promote competition, contribute to the development of the internal market, promote the interests of EU citizens, promote connectivity, and promote efficient investment and innovation in new and enhanced technologies. BEREC believes that network sharing, under the right conditions, can help to fulfil these objectives, and strives to support this by providing a clear and stable framework.
CMS: Does this mean a move away from regulators' traditional focus on network-based competition, and towards one that is service-based? If the latter is now more relevant, how will this change regulators' role?
BEREC: Not necessarily. In general terms it remains important for operators to be able to use their own infrastructure as this is the best way to preserve competition in the long run. However, one of the objectives of the Code is to promote efficient investments and connectivity. Network sharing is one tool that can help reach these objectives. If, under the right conditions, these objectives can only be met by sharing a network, BEREC is favourable to this kind of agreement. In addition, as noted in the Common position, in the case of non-replicable sites or deployments, active sharing could be objectively necessary for competition among MNOs (mobile network operators), and competent authorities might then even mandate active sharing in order to facilitate service-based competition.
It is also to be noted that the EECC (European Electronic Communications Code), complemented by a dozen BEREC guidelines, have or are trying to ease the business case for deployment of VHCN (very high capacity networks) by reducing the cost of deployment, for example: 1) the BCRD (Broadband Cost Reduction Directive) gives operators the potential to access other network infrastructure in order to deploy fibre, 2) it enables access to street furniture for small cell deployment, 3) infrastructure sharing and related co-investments are subject to limited criteria such as openness, fair prices, competition, 4) there are various government subsidies for deployment. The list is long. I can confidently conclude that the telecommunications framework allows many different types of cooperation models.
CMS: What does the slow take-up of 5G by operators in Europe mean for network sharing on the Continent? If network sharing is the result, how can regulators measure progress and hold operators accountable?
BEREC: We don’t believe the slow take-up is due to any blocking of network sharing by NRAs or competition authorities. The timing and roll-out is primarily driven by demand. Competition drives investment, so while we may expect to see a stronger push into network sharing to enable ISPs to profit from synergies, operators may wish to keep networks independent to retain full control of their own plans to roll out the latest technologies and services, without being hindered or constrained by partners (or vice versa). In some countries such as France, network sharing is used to ensure good 5G coverage in rural areas, while maintaining competition. It is up to NRAs and competition authorities to define KPIs and parameters to measure the progress of network roll-out, coverage and service obligations, while preventing network sharing agreements from reducing competition.
CMS: Is network sharing a route back into cross-border consolidation in Europe, and how would regulators oversee this?
BEREC: BEREC has not really seen any cross-border consolidation of networks, due to the fact the markets remain mainly national and have their own specific characteristics. This however remains a possibility.
It is generally up to the competent competition authorities to oversee consolidation and the way they are treated. The NRAs can play a role in this depending on their own competences and the national circumstances.
CMS: To what extent does network sharing offer an opportunity for smaller operators to compete?
BEREC: The 5G standard will enable a much broader ecosystem of MVNOs and MVNOs, supplemented with verticals, and quality of service indicators beyond volume, speed, latency, jitter and reliability. Technology companies will be able to define their own slice, without intervention from MNOs, making it difficult to predict the form of competition that is going to develop. We are closely following these developments in order to adapt the framework, as described in our 5G Radar of 2020. This long-term project aims to anticipate any changes to regulation that may be required to keep pace with innovation for the next five years. Network sharing will offer opportunities to all.
The CERRE (Centre on Regulation in Europe) document Implementing and co-investment and network sharing concludes that all types of mobile network sharing have helped increase the coverage and deployment of new technologies, and that even high degrees of sharing have not dented competition in the retail market for mobile services. Network sharing offers smaller operators an opportunity to increase coverage and diversify services in a way that would probably have been more difficult without any sharing, and therefore compete on a larger scale. The current framework allows a multitude of cooperation models that potentially can cater to all demands. It is up to the relevant authorities to ensure that the regulatory rules and competition law principles are correctly implemented in the relevant markets to ensure that every industry player gets an equal chance to develop its business, and thus encourage stronger competition.