Tower sharing could save billions

In a new white paper, Delta Partners, a telecom advisory and investment firm, claims telecommunications operators in the MEA (Middle East and Africa) region could save $8 billion over the next five years by sharing their towers. ┬á┬á "Network sharing is not a recent trend, but the current economic environment, increasing competition and pressure on margins across M markets, is making operators consider it in order to achieve significant savings in capex and opex,ÔÇØ says Victor Font, managing partner.  ┬á┬á ''In some cases, infrastructure sharing is the only viable way to access rural areas and penetrate lower end segments." The paper "Tower Sharing in the Middle East and Africa: Collaborating in Competition" says over 200,000 mobile network towers are currently in operation across the Middle East and Africa, and an extra 100,000 towers are expected to be rolled out in the next five years.  ┬á┬á Operators invest annually between 10 and 20 percent of their revenues to rollout new sites or upgrade existing ones, and recent multi-billion dollar network sharing deals have already been concluded in India.┬áLast month's announcement that Vodafone and Telefonica would share parts of their European network infrastructure was viewed as a pan-European collaboration that would┬áresult in better quality and coverage, less unsightly masts and save hundreds of millions of Euros for shareholders. "The same shareholder value can be created in the MEA region, but many operators are still a little cautious as they see their network assets as a key asset and differentiator," says Chris Datta, principal."Our analysis has shown that a potential downside in market share is far outweighed by the extra benefits of cost saving on both opex and capex. In other words, operators would have to drop their market share by over 10 percent to not create value," he says. "We see operators, investors and regulators starting to actively support site sharing and we expect it to become a key trend for 2009 and 2010 in the Middle East and Africa" adds Font.