Our global study has also found that national regulators are increasingly willing not only to accept, but to also to mandate network sharing in specific instances.
For example, in March 2020 the UK government announced the creation of the Shared Rural Network, and agreement with the four largest MNOs (EE, O2, Three and Vodafone) to end poor mobile coverage in rural areas by increasing 4G network coverage. The roll-out will be managed by Digital Mobile Spectrum Limited, a JV between the four MNOs, and deliver 4G coverage to 95% of the UK. The Shared Rural Network has a legally binding target to extend coverage to 28,000 premises and 16,000 km of roads by the end of 2025. Ofcom may issue a fine of up to 10% of the MNO’s gross revenue if the targets are not met.
However, such close public-private programmes for network sharing have been rare.
In most jurisdictions, existing rules and regulations have been moulded around an evolving market in a bid to address new opportunities and risks. Not surprisingly then, the most recent focus for regulators has been the roll-out of 5G and the additional spectrum required.
As gatekeepers to new spectrum, some regulators have begun to attach sharing obligations to spectrum awards or issue licences that encourage sharing.
For instance, the spectrum winners of Ofcom's recent £1.4bn spectrum auction were permitted to broker trading deals. O2 and Vodafone took the opportunity to bolster their airwaves coverage by agreeing to share certain licences of their newly acquiring spectrum blocks. Read about it here.
- The European Commission continues its investigation into network sharing agreements involving current and legacy technologies (2G/3G/4G) in the Czech Republic (mainly criticising active sharing in densely populated areas). This is despite the EC’s somewhat contradictory statement that the investigation is without prejudice to any future network agreements involving 5G.
- Italy’s Competition Authority is also pursuing a flurry of investigations. Our research shows that there have been four investigations or decisions conducted in relation to domestic network sharing deals in the last 12 months. The deals that have been cleared are subject to strict commitments relating to non-discriminatory access and transparency.
To this end, we would highlight the decision on the TIM/Vodafone Network Sharing deal (INWIT), where the EC maintained its position that active network sharing should not be implemented in densely populated areas. This seems to be in line with the investigation into the Czech network sharing arrangement.
As our research shows, the trend toward spectrum sharing regimes has been accelerating worldwide. As it stands, 28 countries out of 33 surveyed in the table below allow a MNO licensee to share spectrum; whether with or without prior approval/notification. This provides hope that future regulatory regimes can respond to the new possibilities offered by network sharing.
However, while there is consensus on what regulatory objectives should be - promoting investment, innovation, competition, protecting users and security - the regulatory response itself remains fragmented, static and often divergent. Given this uncertainty, it is important that future developments are closely monitored, and that regulators remain engaged in both new and existing network sharing arrangements.