While in most African countries, the sharing of mobile telecom infrastructure has been integrated into market regulations, this common-sense approach is slow to fully materialize on the continent. This delay is primarily attributed to operators' reluctance to relinquish their dominant positions and regulators' concerns about potential anticompetitive practices.
The sharing of mobile telecom infrastructure offers numerous benefits, including increased mobile network coverage, enhanced service quality - a focal point emphasized by regulators for several years - and reduced costs for various operators. In 2012, a strategy consulting firm indicated that a network operator could save up to 40% of investment expenses through telecom infrastructure sharing.
The International Finance Corporation (IFC) estimated that cash flows for network operators could increase by 31% through such sharing. There are also two types of mobile telecom infrastructure sharing:
- Passive infrastructure sharing involves sharing non-electronic structures such as towers, poles, conduits, and premises.
- Active infrastructure sharing includes electronic components like switches and radio access nodes, exclusive to each partnering operator.
The latter offers more opportunities for savings but is technically more complex.
According to data from the International Telecommunication Union (ITU), 38 African countries have already incorporated mobile telecom infrastructure sharing into their market regulations to encourage mutual investment among telecom operators and promote more judicious use of capital.
However, despite strong regulatory adoption, this approach proves less effective on the ground, hindering African ambitions for accessible connectivity and digital transformation. This challenge, for example, prompted Ghana to adopt a new approach: establishing a neutral shared telecom infrastructure company. Through this entity, the government will make telecom infrastructure and appropriate networks available to operators, who will then rely on them for a monthly or annual fee to provide services to the population.
The two major obstacles to more effective mobile telecom infrastructure sharing on the continent are operators' desire for leadership and regulators' apprehensions about the risk of collusion endangering competition.
Furthermore, telecom operators aim to gain as much market share as possible, ensuring a larger subscriber base and, consequently, more significant revenue. While sharing physical telecom sites is tolerable, allowing competitors to leverage their technical presence in exclusive market niches is more delicate, even with compensation. This explains why passive telecom infrastructure sharing is more prevalent than active infrastructure sharing.
Moreover, regulators in several African markets do not strictly enforce regulations requiring active infrastructure sharing, erring on the side of caution. They view it as a pioneer in commercial collusion and an increased risk of anticompetitive behavior. The key challenge in Africa, as in other telecom markets, is the reconfiguration of regulations to establish conditions that maximize infrastructure sharing benefits and minimize drawbacks.
Exploring Solutions
In addressing the hurdles to telecom infrastructure sharing in Africa, some nations are leading the way with innovative solutions. Ghana, for instance, has established a pioneering model by creating a neutral shared telecom infrastructure company. Here, the government provides access to infrastructure and networks, allowing operators to utilize them for a fee, fostering collaboration while ensuring a sustainable revenue stream. Additionally, Nigeria has implemented regulatory measures to incentivize operators to engage in passive infrastructure sharing, focusing on towers and poles. South Africa is exploring public-private partnerships, while regional blocs like the East African Community aim to harmonize regulations for cross-border infrastructure sharing. These initiatives, along with private sector innovations, signal promising strides towards transforming Africa's digital landscape through collaborative efforts.
In addition, Nigeria, another key player in the African telecom landscape, has introduced regulatory initiatives to encourage infrastructure sharing. Recognizing the potential benefits, the country has implemented measures to incentivize operators to collaborate on passive infrastructure sharing, such as towers and poles. By doing so, Nigeria aims to improve network coverage, reduce operational costs, and enhance overall service quality for its citizens.
South Africa's Public-Private Partnerships: A Model for Collaboration
In South Africa, public-private partnerships have emerged as a model for effective telecom infrastructure sharing. Government initiatives have encouraged collaboration between telecom operators and public entities to share resources, including towers and conduits. This collaborative effort not only contributes to cost savings but also aligns with broader national objectives of expanding connectivity and fostering digital inclusion.
A new approach is important, especially as studies indicate that mandatory infrastructure sharing can be counterproductive. This often leads operators to engage in passive collaboration to meet minimal regulatory requirements, hesitating to invest in new networks or commit to network upgrades and technological development, due to the absence of institutional incentives. Conversely, in contexts with a more flexible approach or where infrastructure sharing is not mandatory, economically efficient sharing practices based on commercial negotiations have emerged over time with regulator encouragement.
