Telcos could save 60pct in capex by sharing infrastructure

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ZIMBABWE’S telecommunications regulator sees mobile phone operators and ICT firms saving up to 60 percent in capital expenditure if the industry adopts infrastructure sharing.
The Postal and Telecommunications Regulatory Authority of Zimbabwe has crafted a consultation paper on regulations for infrastructure sharing in telecommunications industry.
The paper envisages that an infrastructure framework based on an open access model, would realise the attainment of universal access to broadband and other ICT services on a reliable basis and at affordable prices in line with technological developments.
Mobile phone operators have, despite growth of the industry, defended high tariffs citing high investments costs.
Potraz has already invited input into the new policy and will on December 15 hold a workshop to deliberate on the issues.
“Infrastructure sharing provides opportunities for significant reduction in investments or capital expenditure,” reads the paper in part.
“Industry sources cite that passive infrastructure sharing can potentially yield overall cost savings as much as between 15 percent and 30 percent, with clear cost savings on yearly site capital expenditure of up to 60 percent (notably due to less investment duplications).
“(There could also be) significant savings in operational expenditure (mainly costs of renting the sites, site maintenance, personnel and power, air conditioning and fuel expenses).”
For new operators, Potraz said, sharing provides a significant opportunity to reduce time to the market in as much as it is a reduction in market entry barriers.
The past five years have witnessed rapid growth in telecommunications industry as evidenced by the mobile penetration ratio of 106.4 percent as at first quarter 2014 and broadband penetration of 43.1 percent.
Operators have invested rapidly in order to keep abreast with changes in technology trends and consumer needs with the country’s mobile phone operator Econet Wireless injecting $1 billion into economy the since inception.
“However revenues from these investments are still some time away, and are also being threatened by new over -the –top (OTT) services that are riding on these networks.
“Increasing or maintaining the remarkable growth of the ICT sector calls for the construction of infrastructure requiring significant investment,” the Potraz paper reads.Advertisement

“Such investment requirements mean that operators can only realise gains from the investments by charging high tariffs.
“This can be self-defeating as consumers may end up not affording the services thereby rendering the investments unviable.
“This calls for strategies that ensure the optimum utilization of existing and new infrastructure.”