Network expansion stifled by governments, claims consultancy

Operator efforts to improve radio network coverage are being stifled by local government bureaucracy according to a telecoms consultancy firm.

Dawinderpal Sahota

December 4, 2013

3 Min Read
Network expansion stifled by governments, claims consultancy
Operators’ efforts to improve radio network coverage is being stifled by government red tape, claims Strand

Operator efforts to improve radio network coverage are being stifled by local government bureaucracy according to a telecoms consultancy firm.

Research into the past 20 years of building and operating mobile networks conducted by Strand Consult suggests that it has become more difficult for operators to improve coverage efficiently over the years. The firm found that the process to erect a single mobile mast or antenna can take a global average of between 12 to 18 months and cost €100,000 to €250,000 in some markets.

The firm pointed the finger at regulatory authorities around the world which allocate mobile licences, often with coverage obligations attached, but do not ensure favourable terms and conditions for erecting mobile network masts.

The consultancy cited Brazil, where telecom regulator Anatel has been putting pressure on operators to improve radio network coverage or risk losing their spectrum licences. In this market operators are not allowed to sign up new customers if they have coverage or capacity problems and are fined if they violate those rules. However, Brazilian operators are having difficulty in getting permission to erect new mobile network masts and antennas, according to John Strand, CEO at Strand Consult.

“The problem is that Anatel interprets poor mobile coverage as the fault of operators.  The reality is that creating good mobile coverage requires the cooperation of many stakeholders:  politicians, regulators, operators, municipalities, site owners, and so on,” he said.

“The rental costs charged by municipalities for setting up masts is rising by up to 15 per cent each year in some markets. As an analogy it’s like a patient on a life support machine. The municipality can say this is the new price and if you are not willing to pay, then you must unplug your life support machine and you can move to a different hospital. So in practice, there is no choice for operators but to pay these prices.”

Between June 2011 and July 2012 the consultancy conducted an international project that closely examined the conditions that mobile operators are working under in terms of antenna erection. Strand claims the findings of the report improved the terms and conditions for mobile operators in the consultancy’s native country, Denmark.

“The Danish competition authority now focuses on mobile masts,” he said. “Before this report, the competition authority did not expect collusion among local governments. The report revealed cartel behaviour among 15 of 98 municipalities, and as a result the Danish competition authority took action.” The authority implemented a plan to improve the transparency and market conditions for applying and erecting new mobile masts.

“The telecom regulator also became an advocate for the industry in relation to the ministry of business,” Strand added. “There are now a series of dialogue meetings in each region of Denmark between the regulatory authority, municipalities, and operators to work together to improve mobile coverage.”

Locally, Strand claims that public opinion about what causes poor mobile coverage has changed significantly. He said that the Danish press now write about the mobile market and mobile coverage with a more balanced perspective, taking into account the roles and responsibilities of the municipalities and the entire ecosystem beyond the network operators themselves.

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