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5G network sharing in densely populated areas

Commercial 5G services are starting to launch across Europe, following the first round of auctions and is in line with the European 5G Action Plan. 

There is a strong case for the next wave of 5G investment in urban areas to feature network sharing arrangements, which have already proven useful in sparsely populated rural areas that might otherwise have been too costly for multiple operators to serve. 

Across the board, network sharing enables operators to extend coverage at lower cost and reduce capital and operating expenditure, especially in areas where it is uneconomic to deploy several competing infrastructure networks. 

Efficient use of urban space 

5G networks, particularly in urban areas, will require many more base stations (or cell sites) than 3G and 4G have. This will significantly increase network roll-out costs, as operators will need to build new cell sites and RAN infrastructure. Each new cell site will also require backhaul, further adding to deployment costs. 

In dense urban settings, there are fewer locations that can support physical infrastructure requirements. In this case, network sharing agreements can allow more players to offer 5G services in cities.

The costs of 5G

  • Spectrum
  • Upgrading existing RAN infrastructure (masts, base stations and antennae)
  • Upgrading IT and service platforms 
  • New higher-frequency spectrum
  • New infrastructure

Network virtualisation - a new way to ensure competition

5G technology is expected to enable greater virtualisation of networks, resulting in more easily programmable networks that are less dependent on the underlying hardware. Moreover, with ‘network slicing’ it may be possible for a single physical network to be separated into multiple virtual networks, allowing operators to differentiate services hosted on common infrastructure. Therefore, network sharing arrangements could be structured to allow for significant service-level competition between players sharing the same network infrastructure. 

network sharing graph

Network sharing arrangements can enhance consumer choice, by increasing the number of providers that can operate in certain areas, and preserving service-based competition. Thus, there is arguably a strong pro-investment (and pro-competitive) case for network sharing arrangements with advantages such as:

  • facilitating faster network roll-out
  • earlier availability of coverage and services
  • quicker fulfilment of coverage and quality commitments.
Tokyo automated guide-way train

The CMS view: There is much to gain from 5G network sharing in urban areas

While regulators and competition authorities must of course guard against genuine instances of anti-competitive agreements, we believe there are arguments in favour of 5G active network sharing in densely populated areas. This study found a variety of 5G network sharing arrangements in urban areas: in Europe, the most recent examples were in Belgium, Latvia and Lithuania. Hence, it will be interesting to watch how the views of regulators and competition authorities evolve towards these deals and future ones.


Claudia Nagy
Claudia Nagy