Is the time now for a mobile infrastructure provider???

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bbman

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Topic # 56910 28-Jan-2010 11:50

With Telecoms highlighted issues, Vodafone, Telecom and 2degrees site co location and Frequency issues, capacity issues and the LTE future roll outs, is it time for an Infrastructure provider to be set up to provide the mobile networks through out the country and all Telcos wholesale off that?

It is being started and done overseas and due to its inception coverage areas for all networks are greater, no network can claim better coverage or performance than the other, just better customer service, pricing and value adds as differenuators.

KPI is on up time and service delivery and it is governed by a commission, it could be a public company but even have Govt funding... probably need that.

One good reason is better urban, rural and tourist cell coverage, both networks have adequate networks but cannot justify large investment in rural or special tourist routes. But an infrastructure provider can as they can sell to all networks and clip the ticket on all trafic.

We could quite simply offer mobile to more places and have real choice and have a back bone that is renumerated on performance and reliability not just sales.

Seriously can Vodafone, Telecom and 2degrees even afford to upgrade entire networks to LTE etc in the future with falling revenues and more competition.

This would surely open up competition and provide us with more options.

Its a thought and worth discussing as it is happening overseas and NZ is not a wealthy country and maybe this is one option for better mobility nationwide going forward

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Reply # 293874 28-Jan-2010 12:39

Tom Pullar Strecker wrote a column about this yesterday in the Dominion Post .

The issue was first raised by the Commerce Commission in December but there are some potential anti-competition issues that would have to be overcome ore such a network could ever see the light of day.

It's certainly what many networks around the world are doing, the Australian Government even put out tenders many years ago for shared infrastructure to cover highways that would not not have movbile coverage otherwise because of the cost.

MikeyPI

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Reply # 293876 28-Jan-2010 12:44

I think in theory it is a great idea, and one that needs to be followed with the power and fibre model..

Trusting one company with what should be a national asset, is the wrong approach IMHO, and has lead us down this path...

Less expenditure on maintenance on 3 networks should give companies scope to lower prices and still increase profit..
Oh wait telcos arent allowed to make a profit are they?!?!?

AndrewTD

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Reply # 293887 28-Jan-2010 13:04

Yes - I too think a single national infrastructure owner, first for mobile then for fibre, would be the best model for NZ. It should probably be an SOE. Maybe it should be Kordia.
Obviously there would be huge transition issues around such a move - as it would effectively be a nationalisation of private assets.
Unfortunately I think there is a slim chance of such a transition succeeding (and no chance of a single private company doing it.)
But just because it would be very difficult doesn't mean we shouldn't try very hard to achieve it.

kind regards Andrew TD

ariosto

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Reply # 293889 28-Jan-2010 13:08

I think recognising that the needs of a company that supplies network infrastructure are fundamentally at odds with a company that wants to sell telecommunications services to customers would be a huge step forward in the telecommunications industry in this country. One wants complicated, expensive networks and the other wants cheap, simple networks. By exploiting that tension in a commercial way, a better balance could potentially be found than the current model that tends to favour cheap-but-complicated outcomes. (Not to mention that there's a fundamental philosophical difference in the mindset of someone who sells you services as a consumer, and someone who makes those services work.)

Having said that though, one thing to keep in mind with seperating networks out from service providers is that you generally remove the technical expertise/insight that a service provider has from its customer-facing positions. It's a lot harder for a staff member to be able to understand the limitations of the network they're selling you services on, or the reasons why failures occur, if they don't have direct visibility of or information about the nature of that network (just ask any customer of a telco who currently wholesales through Telecom how clear the explanations of the services and products they use are!)

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Reply # 293891 28-Jan-2010 13:14

I don't understand the logic here. The first post begins with a comment about Telecom's recent stability issues, resulting in many Telecom customers losing service. Yet the proposal is to move all providers' eggs into a single basket, so if there's a failure with this proposed network then it'll affect everyone, not just Telecom customers.

Changing from several independent networks to a "single point of failure" doesn't sound productive to me. Am I missing something?

8d52797c436

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Reply # 293896 28-Jan-2010 13:24

Changing from several independent networks to a "single point of failure" doesn't sound productive to me. Am I missing something?

Well unless you own both a Telecom and a Vodafone phone then isnt there a single point of failure anyway?

Also I think the main idea is that if there was one company who's entire purpose was to create the infrastructure for the mobile industry then they would make sure that it never went down, had plenty of redundancy, and would have more money to spend on the network itself.

freitasm

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Reply # 293897 28-Jan-2010 13:24

Behodar: I don't understand the logic here. The first post begins with a comment about Telecom's recent stability issues, resulting in many Telecom customers losing service. Yet the proposal is to move all providers' eggs into a single basket, so if there's a failure with this proposed network then it'll affect everyone, not just Telecom customers.

Changing from several independent networks to a "single point of failure" doesn't sound productive to me. Am I missing something?

What he said...

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MikeyPI

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Reply # 293900 28-Jan-2010 13:35

8d52797c436:

Changing from several independent networks to a "single point of failure" doesn't sound productive to me. Am I missing something?

Well unless you own both a Telecom and a Vodafone phone then isnt there a single point of failure anyway?

Also I think the main idea is that if there was one company who's entire purpose was to create the infrastructure for the mobile industry then they would make sure that it never went down, had plenty of redundancy, and would have more money to spend on the network itself.

@ freitasm..

What he said....

MikeyPI

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Reply # 293904 28-Jan-2010 13:39

And if you read the OP he specifically states

"Is it time for an Infrastructure provider to be set up to provide the mobile networks through out the country and all Telcos wholesale off that?

It is being started and done overseas and due to its inception coverage areas for all networks are greater, no network can claim better coverage or performance than the other, just better customer service, pricing and value adds as differenuators."

Not really isolated to Telecoms stability issues is it?

bbman

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Reply # 293921 28-Jan-2010 14:17

I personally believe this is the only way forward for a sparsely populated and heavy terrain challenging country.

If done right we would have a better performing mobile system, with potential for greater income generation due to the enhanced foot print and multiple carrier ability. Outage effects could be limited due to small areas due to the requirement for greater backbone and core infrastructure.... the list of positives goes on.

It would also open up the network to more players, some might only offer data services, others voice etc, or another could provide something else.

I have heard LTE upgrade figures of $500mil to a Bil for one network..... exactly when would there be a return on investment for any party with a requirement to offer lower cost services now and in the future.

I guess the other thing is this could enable far more efficent use of spectrum if it is all handled by one provider.

The greens would be happy as the cell site development would be far more centralized and instead of 2-3 carrier towers on a street corner you may only need one with large enough capacity etc.

I would imagine a GSM 900/1800 / WCDMA 850/900 & 2100mhz network and in time with LTE these frequencies would become irrelivant anyway.

Certainly an opportunity waiting for a private entity or SOE?

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n4

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Reply # 293955 28-Jan-2010 14:57

I for one would be sceptical of this approach delivering the lower prices and better services that eveyone takes for granted. Lets not forget that it was only 30 years ago (pre 1980) when ALL telecoms in every country (with the possible exception of the US) was handled by a single national entity, for very much the same reasons described here. And what was the result? Slow, inefficient, expensive and basic services. This was the driver towards multiple carriers in the first place. Imagining that having multiple service providers offering the same service off the same platform, with the same fixed costs, and only able to compete on customer service will deliver lower prices is a dream. What sort of price competition do you imagine when everyone has the same basic costs? And where is the competitive pressure on the ugly monopoly you have created to own the network?

Sure you can regulate or otherwise government control the network entity, but since when has THAT been a receipe for efficiency?

This is not to say that there would not be technical efficiencies in doing what is proposed, that is not debatable. However history has shown that competition drives efficiency better in the long run.

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bbman

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Reply # 293960 28-Jan-2010 15:11

n4: I for one would be sceptical of this approach delivering the lower prices and better services that eveyone takes for granted. Lets not forget that it was only 30 years ago (pre 1980) when ALL telecoms in every country (with the possible exception of the US) was handled by a single national entity, for very much the same reasons described here. And what was the result? Slow, inefficient, expensive and basic services. This was the driver towards multiple carriers in the first place. Imagining that having multiple service providers offering the same service off the same platform, with the same fixed costs, and only able to compete on customer service will deliver lower prices is a dream. What sort of price competition do you imagine when everyone has the same basic costs? And where is the competitive pressure on the ugly monopoly you have created to own the network?

Sure you can regulate or otherwise government control the network entity, but since when has THAT been a receipe for efficiency?

This is not to say that there would not be technical efficiencies in doing what is proposed, that is not debatable. However history has shown that competition drives efficiency better in the long run.

Granted from history you have a point but we are talking about more than just competition here, we are talking about better access to services and coverage and the efficent use and control of spectrum. I for one would start a Telco if I could access for the same price as a Telecom or Vodafone and be on a level playing field. Of course Telecom and Vodafone would be paid a good price for there infrastructure.

The other option is an entity is set up that builds in areas where the major Telcos will not or where obvious expansion is required and not viable for one frequency, one Telco. The entity charges the Telcos for the privilige of using there network, clip the ticket. I dont know how that would work with ownership of spectrum though.

I think also more importantly the cost of emerging technologies is so great that alone neither Telecom or Vodafone could do them and make good returns for shareholders for some time, therefore we might get a network in the future but with what missing to keep the costs down...

Its a good discussion to be having as HSPA+ is rolled out and we rely more and more on mobile communication.

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freitasm

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Reply # 293961 28-Jan-2010 15:11

Regulation, with a single SOE entity, with no competition won't lead to required investments in the area, and won't lead to stability, or even to better service. A free market with competition will lead to that.

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bbman

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Reply # 293964 28-Jan-2010 15:20

freitasm: Regulation, with a single SOE entity, with no competition won't lead to required investments in the area, and won't lead to stability, or even to better service. A free market with competition will lead to that.

I would like to think this could be provided by public companies, maybe a tendered situation with a public company contracted to provide it but the infrastructure owned by the crown?

Guarantee of supply is so important and more so going forward, but networks are not cheap and we have a very complicated and challenging topography to deal with and there is no desire from either Telco to provide much more than they do...

This is something that will take a lot of thought and discussion to even get off the ground...

Maybe a nationwide LTE network wholesaled to anyone with no retail, only service provide.

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freitasm

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Reply # 293965 28-Jan-2010 15:22

And then what? In ten years time one government privatises it, and companies start complaining that it's a monopoly, etc? Telecom Corporation - > Telecom Limited all over again?

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