Cell operators in Andhra share cell sites

Hutch, AirTel & IDEA share infrastructure due to increased traffic & to cut down costs

Cellular operators in Andhra Pradesh are learning the virtues of sharing.

The three private operators in the state "� Hutch , AirTel and IDEA "� have started sharing their infrastructure insofar as cellular sites are concerned over the past months.

The three private operators in the state have between them an installed base of about 1,400-plus cellular towers.

According to the industry sources, the move to share cellular towers is because of the twin reasons "� increased traffic and the need for cellular companies to cut down costs.

"The whole idea is to save on the capital expenditure (capex) and share the operating expenditure (opex)," an industry source pointed out.

K Srinivas, chief operating officer of AirTel, Andhra Pradesh, told Business Standard that the move to share the infrastructure was an ongoing process and was beneficial to everybody.

"Wherever we are setting up new sites, we are looking at options. At the moment we are sharing between 25 and 30 sites in Hyderabad with other private operators and probably another 10 sites across the state," he said.

"Tariffs have hit rock bottom. They are the lowest in the world, and we need to optimise costs across operators and that is probably the single biggest reason for this happening," Srinivas said.

The typical cost of setting up a tower could be as high as Rs 5 lakh per location. "The real issue is where are the buildings in the city. There are just not enough. Another issue is the increase in mobile traffic. More people are talking and increased traffic means more towers," an official in Hutch points out.

In technical parlance, each cellular tower has three sectors on offer. Each sector has four cells and every cell in turn can handle up to seven concurrent calls. Only once these sectors are exhausted do cellular companies think of putting up another tower.

But in Indian cities with limited access to building and increased traffic, cellular companies are now being forced to share the infrastructure.

Analysts endorse the network sharing as one of the best ways for carriers focused on urban areas to quickly achieve market share at low costs.

It is estimated that in a 3G (third generation) mobile environment, two mobile operators that share network assets can save up to 38 per cent of the total cost of deploying 3G through capital expenditure reductions, while saving up to 14 per cent in operating expenditures.

Going ahead, telecom industry watchers believe that a business model that could emerge is for multiple start-up service providers to form an association and combine resources to build out a single network to be used by all.

At the network level, sharing is slated to evolve from the current concept of shared radio towers into sharing of actual network equipment and operations support infrastructure.

At present, it is not uncommon to see carriers sharing antenna sites. Limited real estate and environmental concerns posed by the consumers and their municipal governments have driven carriers all over the world to explore what vendors refer to as radio access network (RAN) sharing.