What is active mobile network infrastructure sharing? Trends in active sharing. Why should regulators allow active sharing? Implementing the regulatory changes for active sharing. List of examples.

1. Active Sharing Best Practice
The regulatory viewpoint
Chris Buist, Director
5th April 2017

2. © copyright Coleago 2017 1
Active Sharing best practice - the regulatory viewpoint
Content
1 What is active mobile network infrastructure sharing? 2
2 Trends in active sharing 3
3 Why should regulators allow active sharing? 4
4 Implementing the regulatory changes for active sharing 7
Appendixes:
A Active sharing examples 8
B Contact details 11

3. © copyright Coleago 2017
Definition and types of active sharing
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Active Sharing best practice - the regulatory viewpoint
1. What is active mobile network infrastructure sharing?
Figure 1 – Five dimensions of sharing
Figure 2 – High-level architectural scope definition
Strictly speaking
there are four types
of active network
sharing: MORAN,
MOCN (spectrum
pooling), roaming
and MVNOs.
MVNOs are usually
regulated separately
from the other types
of active sharing.
Consequently the
topic is not covered
further in this
document.
Spectrum trading is
a separate topic
altogether and is not
covered in this
document.
Definition
In Coleago’s Mobile Network Infrastructure Sharing industry overview
(pages 8-11) we explain the five dimensions of network sharing
shown in Figure 1. Active mobile network infrastructure sharing is
defined by the Technology, Architecture and Partner dimensions
highlighted by the yellow text:
 Technology: it may include one or more of the 2G, 3G and 4G
technologies
 Architecture: refer to Figure 2 for details; note that some
regulators treat antennas and backhaul transmission separately
from the active equipment, although we do not recommend doing
so; by default, active sharing requires the passive infrastructure to
be shared
 Partners: active mobile network sharing will normally be between
two or more MNOs; it may also be between an MNO and a fixed
wireless service provider.
Types of active sharing
Strictly speaking there are four types of active network sharing:
 Multi-Operator Radio Access Network (MORAN) which includes
the radio access network defined by the three right-hand columns
in Figure 2 (namely Antennas, Active Equipment and Backhaul
Transmission)
 Multi-Operator Core Network (MOCN) which is the same as
MORAN but includes the pooling and sharing of the MNOs’
spectrum
 Roaming where users from one MNO are able to access the
network of a second MNO within the same country; usually limited
to a geographical area such as rural areas; for the purpose of this
document, international roaming is not covered
 Mobile Virtual Network Operator (MVNO) is an operator licensed
to use the RAN and spectrum of another operator; the MVNO
does not hold a spectrum licence and may (“heavy/thick/full”) or
may not (“light/thin”) own a core network.
Source: Coleago
Source: Coleago

4. © copyright Coleago 2017
Active sharing constitutes 45% of all sharing deals and is increasing
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Active Sharing best practice - the regulatory viewpoint
2. Trends in active sharing
Figure 3 – Sharing deals between 2001 and 2016
Figure 4 – Active sharing is increasing
Coleago’s Mobile Network Infrastructure Sharing industry overview
(pages 4-6) discusses the overall trends and drivers in mobile
network sharing. In this section we compare the differences between
passive-only and active sharing. How the two types of sharing
compare depends on: whether tower sale and lease-back deals are
included in passive sharing; and, whether roaming deals are included
in active sharing.
Tower sale and lease-back deals has been one of the key trends
since 2010, starting in Africa but now global. It should be considered
a type of passive sharing deal because tower companies are
motivated to ensure that every site is shared by multiple operators.
Similarly there are many roaming deals whose objective is long term
and not simply to assist a new entrant during its first few years of
operation. Such roaming arrangements are also a key trend since
2010, often limited to rural areas.
There are clear regional differences:
 Active sharing dominates in Europe (65% of all deals)
 Passive sharing dominates in Africa (68%) and Asia-Pacific (59%)
Looking to the future we forecast that within the next five to ten years:
 Active sharing will dominate in all regions and thus there will be
many more active deals in the African and Asia-Pacific regions
 Due to spectrum scarcity, in markets with four or more operators
there will either be mergers/acquisitions or more MOCN deals
 Consequently larger markets will end up with four MNOs with two
shared networks between them; smaller markets may only be
able to support three MNOs with two networks between them
 Developments in Network Function Virtualisation (NFV) may
enable core network sharing.
Source: Coleago
Source: Coleago

5. © copyright Coleago 2017
Active sharing maximises the benefits of sharing for customers, the economy and the government
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Active Sharing best practice - the regulatory viewpoint
3. Why should regulators allow active sharing?
Figure 5 – Active sharing maximises the cost savings
Figure 6 – Flow of benefits from MNOs’ cost savings
Despite the myths
there are no
negative impacts of
active sharing on
investment or
competition.
Active sharing (MORAN, MOCN or roaming) provides much higher
capital (CapEx) and operating expense (OpEx) savings than passive
sharing. Figure 5 summarises a study by Nokia of cost savings from
two MNOs rolling out a new shared network in a theoretical
developing market; the savings are presented as a percentage of
total network costs. As the CapEx saving for a site is one-time only
whereas OpEx savings are recurring, after a few years the OpEx
savings become the more important.
Customers benefit from the greater savings as a result of the MNOs’:
 Being faster to market with coverage and services
 Increasing geographical coverage
 Better performance in terms of quality and bandwidth (in the case
of MOCN)
 Ability to offer more competitive prices.
From the government’s perspective the benefits are typically:
 Fiscal: (dependent on the tax regime) increased tax income due to
the MNOs’ revenue and cost benefits
 GDP: impacted by the increased addressable market, more
competitive tariffs, etc.
 Environmental: reduction in total carbon footprint.
At the same time, our research for the Communications Regulators’
Association of Southern Africa (CRASA) and the ITU showed that in
countries with at least five years of network sharing:
 Investment as measured by CapEx/Revenue has remained
constant or increased
 Although it probably only plays a small part within the variables
that impact prices, sharing may have had a neutral or even a
beneficial impact on prices.
Note also that MORAN and MOCN (but not roaming or “light/thin”
MVNOs) preserve service-level competition because the MNOs are
able to configure and control their services from their core networks
which are independent.
Source: Infrastructure Sharing for MNOs, Nokia (2007)
Source: Coleago

6. © copyright Coleago 2017
Active sharing is the most cost-effective approach to increase rural broadband coverage
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Active Sharing best practice - the regulatory viewpoint
3. Why should regulators allow active sharing?
Figure 7 – Active sharing maximises rural broadband coverage
Figure 8 – Different sharing scope by geography
At the last count there were more than ten global initiatives with a
similar objective: to “connect the unconnected” or in other words to
provide broadband services in rural/remote areas to those who
currently don’t have access to the Internet. Putting aside the question
of how effective the initiatives are, there has undoubtedly been some
progress at the national level as most countries now have a national
broadband plan.
Mobile is the most cost-effective technology to provide broadband
coverage for such areas. Furthermore infrastructure sharing is a key
enabler. Our work for the GSMA’s Connected Society programme in
Tanzania, Indonesia, Bangladesh and Chad clearly shows that a
single active-shared network maximises the rural/remote broadband
coverage.
This leads us to elaborate on the forecast trend described on page 3
and depicted in Figure 8:
 In urban and rural areas…larger markets will end up with four
MNOs with two shared networks between them; smaller markets
may only be able to support three MNOs
 In all markets, the only solution to provide broadband coverage in
remote areas will be a single RAN actively shared by two or more
MNOs.
Source: Coleago
Source: Coleago

7. © copyright Coleago 2017
Active sharing may help address spectrum scarcity and maximise spectrum value
MOCN is a simple-to-implement technique to address spectrum
scarcity
In many emerging markets with four or more mobile and fixed-
wireless operators, there may be limited spectrum availability
particularly in the sub-1 GHz bands. Unless more spectrum can be
made available, some operators may struggle to re-farm spectrum for
3G or 4G leading to a degradation in network quality. In such cases
operators have three choices: enter into MOCN active sharing with a
competitor, merge/acquire a competitor or exit the market.
Allowing MOCN sharing is a simple-to-implement technique for a
regulator that will preserve or improve competition.
Active sharing maximises spectrum value in unbalanced
markets
The market structure in many developing countries is often
unbalanced with one or two dominant players and several sub-scale
players.
Regulators strive to achieve various policy objectives when allocating
spectrum. Auctions are usually considered the best approach to
achieve such objectives. However, the risk is that the weaker players
are unable to pay the same price as the larger ones and miss out on
the new spectrum. Competition becomes even more unbalanced.
When designing an auction, there are various approaches that
regulatory authorities consider to help address imbalance, such as
reserve prices, set-asides, bidder credits or multi-stage auctions.
However before doing so they should review their network sharing
policy and framework because:
 MORAN active sharing reduces CapEx and OpEx which therefore
increases spectrum value to the sharing operators
 MOCN may enable two (or more) operators to share the same
spectrum block/lot without one losing out altogether, thereby
increasing spectral efficiency and preserving or increasing
competition.
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Active Sharing best practice - the regulatory viewpoint
3. Why should regulators allow active sharing?

8. © copyright Coleago 2017
Allow all types of sharing as long as they comply with competition legislation and regulations
7
Active Sharing best practice - the regulatory viewpoint
4. Implementing the regulatory changes for active sharing
Coleago developed the ICT and Broadcasting Infrastructure Sharing
Guidelines for CRASA and the ITU, which provides:
 Nine key principles that a regulatory framework should embody
 Cross-sector process to implement the principles (Figure 9 below)
 Numerous examples and templates.
The most important principle from the perspective of active sharing is:
(P2) All types of sharing should be permitted so long as competition is
not adversely affected.
The recommended approach is to permit all types of sharing but
clarify that they must comply with competition legislation and
regulations.
Guidance on how to apply this principle is:
 Use the “five dimensions of sharing” (Figure 1) to check that the
regulatory framework addresses all potential “technologies” and
“architectures”
 The regulatory framework should provide clear guidance on the
types of sharing agreements that will require telecommunications
and competition regulatory authority approvals, along with the
process and indicative timetable
 Clarify the principles or requirements that will be used as the basis
for evaluation, for example:
– Control: each partner needs to have independent control of its
services
– Confidentiality: no exchange of competition-related data
beyond that needed to design, build and operate the shared
infrastructure.
The Guidelines provide examples of best practice from the EU, India,
Malaysia, Portugal and Singapore.
• Set up project team
• Prepare project plan
• Identify regulatory
changes
• Draft regulatory changes
• Feasibility Study and
Business Case for
infrastructure sharing
database
• Consultation
• Finalise sharing policy
and regulations
• Implement process
changes
• Implement sharing
database
• Undertake SMP
review(s), if nec.
Figure 9 – Consultative cross-sector implementation approach

9. © copyright Coleago 2017
Recommended next steps regarding network infrastructure sharing
Without undertaking a detailed review of the relevant legislation and
regulation, Coleago is only able to offer general advice regarding
network infrastructure sharing.
Decide on the scope of change
Probably the most important next step is to decide the scope of the
regulatory changes. Will it simply be to extend the existing passive
mobile network sharing to permit all forms of sharing? A larger scope
of work would be to implement all the key principles set out in the
CRASA/ITU Guidelines for all telecommunications, mobile and fixed.
Identify the legislation/regulation that needs to be changed
Once the scope of the changes is decided, the next step should be to
identify the legislation and regulation that will need to change. In the
simple case (extending passive to include active sharing), it may only
be the infrastructure sharing guidelines that need to be revised. Use
the CRASA/ITU Guidelines to identify and review the regulations
implemented by regulatory authorities in other countries.
Plan and communicate the consultative change process
Finally, in terms of the next steps, map out the process to implement
the regulatory changes, especially how the affected industry parties
will be involved and the timeline.
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Active Sharing best practice - the regulatory viewpoint
4. Implementing the regulatory changes for active sharing

10. © copyright Coleago 2017
Americas region
Country MNO1 MNO2 Deal Type Date
Canada Bell Mobility Telus Active (MORAN) Oct-08
Canada Rogers Videotron Active (MORAN) Jul-09
Canada Rogers Manitoba Telecom Active (MORAN) Jul-09
Canada Bell Mobility SaskTel Active (MORAN) Oct-09
Brazil Oi TIM Brasil Active (MORAN) Mar-13
Brazil Telefónica (Vivo) América Móvil (Claro) Active (MORAN) Mar-13
Colombia Telefónica (Movistar) MIC (Tigo) Active (MORAN) Aug-13
9
Active Sharing best practice - the regulatory viewpoint
Excludes roaming
and MVNOs
Appendix A. Active sharing examples

11. © copyright Coleago 2017
European region
Country MNO1 MNO2 Deal Type Date
Sweden TeliaSonera Tele2 Active (MOCN) Jan-01
Sweden Telenor Sweden Hutchison (3) Active (MOCN) Apr-01
Spain Vodafone Spain Orange Spain Active (MORAN) Nov-06
United Kingdom T-Mobile UK [now EE] Hutchison (3) Active (MORAN) Dec-07
Sweden Tele2 Telenor Sweden Active (MOCN) Apr-09
Czech Republic Telefónica O2 [now O2 Czech
Republic]
T-Mobile CR Active (MORAN) Feb-11
Denmark TeliaSonera Denmark Telenor Denmark Active (MOCN) Jun-11
Poland T-Mobile (PTC) PTK Centertel [now Orange
Polska]
Active (MORAN) Jul-11
United Kingdom Vodafone UK Telefónica (O2 UK) Active (MORAN) Jun-12
Greece Vodafone Greece Wind Hellas Active (MORAN) Jun-13
Romania Vodafone Orange Active (MORAN) Aug-13
Iceland Fjarskipti (Vodafone) Nova Active (MOCN) Nov-13
France SFR Bouygues Active (MORAN) Jan-14
Finland TeliaSonera Finland DNA Active (MOCN) Aug-14
Russia Vimpelcom MTS Active (MORAN) Dec-14
Hungary T-Mobile (Magyar Telekom) Telenor Active (MORAN) Feb-15
Russia MegaFon VEON (Beeline) Active (MORAN) Jan-16
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Active Sharing best practice - the regulatory viewpoint
Excludes roaming
and MVNOs
Appendix A. Active sharing examples

12. © copyright Coleago 2017
Middle East & Africa and Asia-Pacific regions
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Active Sharing best practice - the regulatory viewpoint
Appendix A. Active sharing examples
Country MNO1 MNO2 Deal Type Date
Israel Partner HOT Mobile Active (MOCN) Nov-13
Israel Cellcom Golan Active (MOCN) Sep-14
Tunisia Ooredoo Tunisia Tunisie Telecom Active (MORAN) Oct-15
Israel Cellcom 018 Xfone Active (MOCN) Jul-16
Middle East & Africa
Asia Pacific
Excludes roaming
and MVNOs
Country MNO1 MNO2 Deal Type Date
Australia Vodafone Hutchison Australia Optus Active (MORAN) Aug-04
Vietnam Viettel [formerly EVN Telecom] Hanoi Telecom (Vietnamobile) Active (MOCN) Apr-09
Hong Kong PCCW Hutchison (3) Active (MOCN) Oct-10
Malaysia Maxis U Mobile Active (MORAN) Oct-11
Malaysia Maxis REDTone Active (MOCN) Jul-12
Azerbaijan Bakcell Azerfon Active (MOCN) May-13
Malaysia Celcom Puncak Semangat (Altel) Active (MOCN) Jul-13
Papua New Guinea Telikom PNG bmobile Active (MORAN) Aug-14
Kazakhstan K’cell VEON (Beeline) Active (MORAN) Aug-16

13. © copyright Coleago 2017
Contact details
12
Active Sharing best practice - the regulatory viewpoint
Appendix B
Chris Buist
Tel: +43 664 352 1068
chris.buist@coleago.com
Director