Coleago Networksharingoverviewv011100215cb 150212042055 Conversion Gate01 PDF

Mobile Network Infrastructure Sharing
Industry overview and Coleagos approach
Chris Buist, Director

May 2016
Executive Summary
Data traffic and global initiatives to provide rural broadband coverage will be the future drivers
Mobile data traffic is
doubling every two
years. Revenues are
growing much more
slowly or even
falling. Financial
performance will
suffer unless
operators take action
to share infrastructure or enter
into M&A.
In many emerging
markets, sharing is
also being driven by
limited spectrum
availability or
government ambition
to improve rural
broadband services
the latter driven by
a plethora of global
initiatives led by the
UN, NGOs and
commercial entities
such as the GSMA.
Network sharing has grown rapidly since 2009
First-mover advantage operators need to act
Internal & external

analysis
Business case
Approach partner(s)
Negotiate Heads of
Agreement
Strategy
JVs between MNOs and tower sale-and-leaseback deals have taken

off since 2009. In the last few years some multinational MNOs have
started to establish captive tower companies. Sharing has also led
some shareholders to consider consolidation.
Looking forwards, new trends are likely to be rural/remote
infrastructure sharing and increased spectrum sharing. Technologies
such as NFV and SDN may open up new sharing opportunities.
To identify potential sharing options, operators need to consider five
dimensions: technology scope, geographical scope, architectural
scope, potential partners and sourcing.
Ultimately network sharing is driven by the need to maximise
Enterprise Value. The major benefit from network sharing is a net
reduction in network CapEx and OpEx, usually in the range from 1040% of the in-scope costs dependent on the sharing option. As with
any major programme, there are numerous risks that need to be
analysed and, where possible, mitigated.
Negotiation
Regulatory approval
Design To-Be
Negotiate
Agreement(s)
Conduct due diligence
Plan
Establish JV
Transfer staff, assets
Implement processes,
systems
Transformation
Depends on sharing
scope
Transition
There is no time to lose because there is clear evidence of a firstmover advantage, or at least a last-mover disadvantage. For
passive/active sharing JVs, it is better to choose your preferred
partner than be handed a partner by default or, in the case of a threeplayer market, left with no partner. Similarly, information from
completed tower sales shows that the first to market will command a
higher price than the followers.
Coleagos approach is applicable regardless of the sharing option
selected. It is designed to work as well for a tower deal with a
TowerCo as it does for an active RAN share with another MNO.
Typically, it takes between 9 and 15 months for the first three phases
depending on the sharing option, regulatory approval(s), the need to
transfer assets and the willingness/ambition of the partners. The
Transformation phase may take several years to deliver all the
savings.
During the last decade our consultants have built up experience
across every type of sharing deal and all phases. We provide a
complete range of services to support or lead your project team
throughout the process.
copyright Coleago 2016

Section:
Page
Industry Status, Trends and Drivers
Potential Solutions, Benefits and Risks
Coleagos Approach
14
Coleagos Experience and Services
21
Why Coleago?
Contents
Appendix:
A
Connecting the Unconnected: Rural/Remote Broadband Initiatives
Network Sharing Database and Regional Indexes
Tower Companies
About Coleago
Contacts

Industry status, trends and drivers

Global situation. Current and future trends. Key drivers.

1. Industry status, trends and drivers
Network sharing has grown rapidly since 2009

Countries shaded
according to deal
with deepest extent
of sharing.
Status is based on
public
announcements to
end-2015.
Excludes national
roaming, MVNOs,
transmission-only,
captive tower
companies and
informal or
unannounced site
sharing deals.

Current and future trends in mobile network sharing

More than 60% of
the deals to date are
RAN-sharing joint
ventures that
maximise savings.
Tower companies
are expanding
rapidly with the
backing of PE funds
but in the last few
years MNOs have
also started to
establish captive
tower companies.
Of the future trends,
rural/remote sharing
is probably the most
significant given the
sums involved and
the plethora of global
initiatives led by UN
bodies such as the
ITU, UNESCO and
the World Bank.
Current trends
Mobile network sharing is not new. It has been around for decades in
one form or another, starting with national roaming and site sharing
usually encouraged or mandated by regulators to help new entrants.
Four trends have emerged since the millennium:
Network sharing Joint Ventures (JVs) between MNOs
Whereas site sharing started off in many markets as a mutual
exchange involving a small percentage of sites, a JV can go much
further to maximise the number of shared sites and cost savings,
typically 25-40% of the in-scope costs. Furthermore the scope of
radio access network (RAN) sharing has been extending from
passive to active (MORAN) and, in some cases, to spectrum
pooling/sharing (MOCN).
Tower sale-and-lease-back deals
By the end of 2015, some 45 operators had sold their towers to
third parties (or formed joint ventures) and leased them back. The
majority of these transactions have been in Africa but similar deals
are now taking place in all other regions. Given their long-term
secure cash flows and growth prospects, tower companies are
attracting considerable Private Equity (PE) investment thereby
facilitating further deals.
Captive tower companies
Separating passive infrastructure into a subsidiary may be
beneficial from an operational efficiency perspective. It may also
open up a range of alternative financing options including joint
ventures, stock exchange flotation or eventually a sale. Recent
examples include Airtel Africa, Amrica Mvil (Telesites), Axiata
(edotco), Telefnica (Telxius) and Telecom Italia (INWIT). It may
explain some of the recent drop-off in sale-and-lease-back deals.
In-market consolidation
Undoubtedly discussions about sharing are leading some
shareholders to be more radical and consider consolidation;
Coleago believes that most markets will end up within the next
five years with only three mobile operators and two (shared)
RANs.
Future trends
Three further trends are expected to emerge over the next five years:
Rural/remote infrastructure sharing
Most MNOs have finished rolling out 2G, and in some cases 3G,
coverage as far as is financially feasible. Any further roll-out will
be slow and depend on GDP growth and unit cost reductions.
Most governments have now developed national broadband
plans, encouraged by the ITU and the Broadband Commission,
that include objectives to provide broadband access to rural areas
(see next page). Usually the only cost-effective solution to achieve
such an objective is 3G or 4G infrastructure shared between two
or more MNOs using active sharing or roaming.
Network Functions Virtualisation (NFV) and Software-Defined
Networking (SDN)
NFV and SDN are emerging complementary technology
developments that might enable and encourage further types of
network sharing in the future, depending on how standards and
OEM products/services evolve. In particular they may enable
much greater core network sharing.
Spectrum sharing
There are currently 14 spectrum pooling/sharing (MOCN) joint
ventures between MNOs. With mobile data traffic doubling every
two years, MOCN deals are likely to increase but NRAs will still be
under considerable pressure to release more spectrum. Some
NRAs such as the FCC in the USA and Ofcom in the UK are
evaluating advanced spectrum sharing using lightly licensed or
unlicensed spectrum.

Drivers: EBITDA pressure, spectrum scarcity and government policy

EBITDA pressure
has been and will
continue to be the
predominant driver.
Government policy
related to broadband
objectives for
rural/remote areas
will become
increasingly more
important over the
next five years.
What is driving the huge increase in sharing, tower sales and

consolidation? The uptick in sharing deals since 2009 has been due
almost exclusively to EBITDA pressure but this is set to change with
the global initiatives to provide rural/remote broadband coverage.
Connecting the unconnected: making sense of the initiatives
EBITDA pressure from competition and the data tsunami

EBITDA pressure has been and will continue to be the predominant
driver, be it as a result of revenue competition (new entrants, MVNOs
or OTT players), regulators reducing termination rates or international
roaming fees (Europe and Africa), or the rapid increase in mobile
data traffic. The latter is possibly the most significant, with data traffic
forecast to double every two years.
LTE roll-out has been the burning platform for numerous network
sharing deals. LTE creates two major cost pressures for an operator.
Initially it requires a major capital investment in licence/spectrum
fees, network elements and transmission, with a commensurate
increase in operating costs. Later, as take-up increases, LTE users
consume two to three times the amount of data compared to 3G
users, incurring further capital and operating expenditure but with
limited revenue upside.
See Appendix A
for further details
Spectrum scarcity will be a driver in some markets

In many emerging markets with more than four mobile and fixedwireless operators, limited spectrum availability is causing operators
to evaluate MOCN sharing versus consolidation. Which direction they
choose to go will depend on government competition policy,
shareholder objectives and the business case.
Connecting the unconnected: rural/remote broadband initiatives
EBITDA: Earnings Before

Interest, Tax, Depreciation
and Amortisation
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 dont have access to the Internet. Putting aside the question
of how effective they are, there has undoubtedly been some progress
at the national level as most countries now have a national
broadband plan, although the quality of the plans and the
implementation progress to date are mixed to say the least. Similarly,

many government departments and regulators have realised that
mobile is the most cost-effective technology for such areas and that
infrastructure sharing is a key enabler. Consequently some
governments have become much more proactive about sharing and
have started to change their regulatory frameworks accordingly.
Yet the industry has not appreciated two of the key ingredients to
finding a solution for such remote areas:
All operators will need to actively share a single network
The government will also need to provide fiscal measures (e.g.,
tax changes, licence/spectrum fee reductions, USF funding, etc.)

Without this common understanding, progress will continue to be
slow and patchy.
Potential solutions, benefits and risks

Five dimensions of network sharing. Maximising Enterprise Value. Common risks.

2. Potential solutions, benefits and risks
Identify potential
sharing options by
considering these
five dimensions:
technology scope,
architectural scope,
geographical scope,
potential partners
and sourcing.
Sourcing
The five dimensions of network sharing technology scope

For the main options, there will also be a number of what-if?
scenarios to evaluate, for example, timing, future spectrum events,
exit of either partner, etc. and a comparison of alternative payment
mechanisms.
There may also be one or two combinations to consider, for example,
an active RAN share followed by a tower sale-and-lease-back deal
once the sites have been rationalised, or vice versa.
Technology scope: 2G, 3G, 4G, WiFi?
Savings from network sharing are greater for new networks than from
existing (legacy) networks. Rationalising legacy networks requires
sites to be dismantled or modified and equipment to be relocated or
scrapped, the costs of which will reduce the net savings.
Recent spectrum events relating to LTE and 2G/3G re-farming
present a major opportunity and should be the catalyst to evaluate
network sharing before investing in new sites or equipment.
It is all too easy to jump to a solution without considering all the

possible options. Every sharing option has its own combination of
benefits and risks that are worth comparing before selecting a
preferred way forward.
To identify potential sharing options, use the five dimensions shown
in the figure above and described in this section, namely: technology
scope, architectural scope, geographical scope, potential partners
and sourcing.
There may be as many as 50 theoretical options. They can usually be
narrowed down to a few main ones with a number of variations
thereon, all of which need to be evaluated and compared against a
no-sharing base case.
However the legacy sites and equipment will almost certainly affect
the decision as to what technology to include in the sharing scope.
Differences between the sharing partners in terms of their existing
equipment (2G versus 3G, outdoor versus indoor, depreciated value,
energy consumption, etc.) and spectrum bands may cause the
partners, for example, to limit their sharing to the roll-out of new 4G
equipment. Whatever the differences, it is usually worth evaluating all
the technology options to understand the potential payback.
Examples:
Canada: Rogers and Videotron is 4G-only
Greece: Vodafone and Wind is 2G/3G-only
Sweden: Telia and Tele2 is 3G-only, Tele2 and Telenor is 2G/4G-
only
If the shareholders and management team are open-minded, then the

other extreme should also be evaluated, i.e., a merger or acquisition.
If the two potential partners are about to invest in new RAN

equipment to introduce new technology (3G or 4G), then an active
share becomes much more attractive.
Less than 10% of network sharing deals involve spectrum sharing or
pooling (MOCN) for a variety of reasons, such as:
Both partners have sufficient spectrum for their needs (capacity
and broadband speed) taking into account features such as

carrier aggregation
One partner has a spectrum advantage and is unwilling to share it
for competitive reasons

The regulator is unwilling to sanction spectrum trading or sharing.
As mobile data traffic continues to grow, regulators will be pressured

to release more spectrum. In some markets, spectrum pooling may
be one of the solutions to this demand.
To date there are no Core Network (GWCN) sharing deals because
regulators have strongly opposed such arrangements for reasons of
competition. However, developments in NFV and SDN may change
this situation and therefore sharing agreements should recognise this
potential future change in scope.
Transmission
(backbone)
Core network
elements
Spectrum
Transmission
(backhaul)
Undoubtedly active sharing provides the greatest total savings.

However it is important to understand the incremental benefit over
the other models particularly given variations in some of the other
network sharing dimensions, e.g., potential partners and sourcing.
Architectural
Model
Site
The table at right shows the main architectural models for network
sharing.
Antennas &
feeders
Architectural scope
RAN elements
The five dimensions of network sharing architectural scope
Passive
Active RAN
MORAN
MOCN
Transmission
Core Network
(GWCN)
National
Roaming
Full MVNO
Thin MVNO
MORAN: Multi-Operator Radio Access Network
MOCN: Multi-Operator Core Network
GWCN: Gateway Core Network
MVNO: Mobile Virtual Network Operator
Examples:
Bangladesh: Airtel and Telenor (Grameenphone) is passive
Denmark: Telenor and Telia is active (MOCN)
UK: EE and Hutchison is active (MORAN)

The five dimensions of network sharing geographical scope and potential partners
Geographical scope
Potential partners
Urban areas usually present more valuable opportunities than rural

areas for competitive differentiation in terms of network quality, inbuilding coverage, service features, etc. and so it often makes
strategic sense not to share in such areas but where to draw the
line?
For the same reason, regulatory or competition authorities may
impose a limit on the geographical extent of network sharing; in
Sweden, Telenor and Hutchison were only allowed to share their 3G
RANs up to a maximum 70% population coverage (since relaxed).
CapEx and OpEx differ between rural (typically towers) and urban
(typically rooftop) sites resulting in different payback periods and
NPV. Urban sites may also present difficulties in terms of space
availability, radiation limits, planning restrictions, etc.
Given the emerging trend to extend broadband coverage to
rural/remote areas (see page 6), it may be necessary to consider
different sharing arrangements for urban, rural and remote areas.
Taking a theoretical example of a country with four MNOs, it might
end up with two MNOs sharing in the urban and rural areas, the other
two MNOs only sharing in rural areas and all four MNOs sharing in
the remote areas.
Geography is also an important aspect when considering the
sourcing dimension (next page). An approach used in some sharing
deals is to partition the country between the parties for design, build
and O&M, for example, Vodafone and O2 in the UK.
Other examples:
Finland: Telia and DNA is rural-only, equating to 50% land area
and 15% of the population

France: SFR and Bouygues is rural-only, equating to 57% of the
population
There may only be a few potential MNO partners or tower companies

from which to choose but you still need to evaluate their fit against a
number of criteria (see chart above). High-level examples of the
evaluation criteria include:
Commercial fit: for example, market share, competitive
differentiation (including brand)

Technical fit: in terms of spectrum (and therefore site grid),
technologies, vendors and MS providers

Cultural fit: experience from any existing relationship,
management styles, corporate values, etc.

Ownership: international versus local, public versus private,
shareholder ambitions, etc.

Note that the evaluation score of a potential partner may differ
according to the sharing option being evaluated.
Greece: Vodafone and Wind is rural and limited selected urban
areas, equating to 70% of rural and 40% of urban population

10
The five dimensions of network sharing sourcing

Joint Venture (JV)
JV outsources to MSP
JV outsources geographically to Partners
Unilateral or Bilateral
For active sharing and some passive sharing deals, a 50:50 JV is

the norm. It will be the overall authority for designing, building and
operating the shared network. However responsibility for any of
these activities may be undertaken by the JV itself or outsourced,
possibly on a geographical basis, to:
The JV partners: one or both of the partners may be the best
solution for delivering some of the scope, for example, each
partner could take responsibility for designing and building the
shared network in different geographical areas with the JV
responsible for overall design authority, programme

management and O&M
Managed Service (MS) provider(s): one or more MS providers
may be part of the solution; their contract(s) could also be
extended to include the (unshared) legacy networks, thereby
providing benefits beyond the network sharing itself.
By its nature, roaming is a unilateral or bilateral arrangement.

11
Ultimately network sharing is driven by the need to maximise Enterprise Value
Some of the cost savings may be converted into revenue benefits by

improvements in the addressable market, market share and ARPU
as a result of:
Active
(MORAN)
Active
(MOCN)
Dependent on the option being considered, there may be additional

up-front costs, for example, relocating equipment, dismantling sites,
transitioning staff to a JV, creating new process/OSS interfaces, etc..
The payback period on these costs is usually fast but needs to be
evaluated at the overall level for the business case and at the
detailed (site) level during implementation.
Passive &
backhaul
The major benefit from network sharing is a net reduction in network

Capital Expenditure (CapEx) and Operating Expenditure (OpEx). The
table at top right shows the typical savings for each type of
architectural option (see page 9) based on modelling of two MNOs in
a developing market.
Passive
Network sharings
impact on Enterprise
Value (EV) is
primarily through a
net reduction in
network CapEx and
OpEx, which in turn
improves EBITDA,
ROCE and the EV.
New CapEx
18%
20%
33%
33%
Network OpEx
9%
12%
20%
21%
Source: Infrastructure Sharing for MNOs, Nokia (2007)

Percentages are of total network OpEx and CapEx
Coleago rule of thumb is 20-40% of in-scope costs
Legacy network rationalisation typically reduces site count by
30%
Faster time to market (coverage and services)
Greater geographical coverage

Better performance in terms of quality and bandwidth (in the case
Passive
Active
(MORAN)
Active
(MOCN)
Roaming
of MOCN)
Savings
Set-up time
Control over rollout and quality
Regulatory
approval
Ability to offer more competitive tariffs.
From the governments 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 and visual
pollution (fewer towers).

EBITDA: Earnings Before
Interest, Tax, Depreciation and
Amortisation
Although greatly simplified, the table at lower right summarises the

differences between the architectural options when comparing some
of they key selection criteria.
ROCE: Return on Capital

Employed

12
Maximising the savings by combining tower sales, active sharing and outsourcing deals
Given the mobile
data traffic forecasts,
MNOs need to
maximise their
network savings.
That means using all
means available to
them: a combination
of tower sale-andleasebacks, active
sharing and
outsourcing to
managed service
providers.
Maximising savings Brazilian examples

To maximise their savings, MNOs that have completed TowerCo
deals need to look at how they might form active sharing partnerships
and vice versa. Furthermore are there additional savings to be had
from outsourcing to a Managed Services Provider (MSP)? Brazil
provides some good examples.
In early 2013 Telefnica (Vivo) sold its towers to SBA and a few
months later entered into an active sharing agreement with Amrica
Mvil (Claro).
Meanwhile, Oi and TIM Brasil had entered into an active sharing
agreement just ahead of their competitors. Subsequently, in 2014, Oi
sold its towers to SBA and TIM sold its towers to American Tower.
There may still be further savings to be had from network
outsourcing, as only Oi and Vivo have entered into such agreements
to date.
Network sharing and consolidation examples from Denmark, Australia, Ireland and the UK
In markets with more than three MNOs, sharing might be a precursor
the regulatory conditions to approve the acquisition was that
to consolidation as demonstrated in Denmark where the local units of
Hutchison must honour the O2 network sharing agreement with
TeliaSonera and Telenor set up an active network sharing JV in 2011.
Eircom.
In December 2014 the pair announced their intention to complete a
At the time of writing, the UK presents a similar conundrum. EE and
full merger but retracted the decision in light of opposition from the
Hutchison (3 UK) have had an active network sharing JV since 2007,
European Commission.
while Vodafone and Telefnica (O2 UK) established theirs in 2012.
Australia and Ireland have shown that sharing doesnt preclude
Hutchison has recently entered into negotiations to acquire O2 from
consolidation with a different partner:
Telefnica. Should the acquisition be agreed between the parties, it
In Australia in 2004, the four MNOs entered into two sharing deals: will not make technical or financial sense for 3/O2 to remain in both
network sharing JVs. Whichever JV 3/O2 exits will put the jilted party
Telstra with Hutchison (3), and Optus with Vodafone. In 2009
at a financial disadvantage to the other MNOs. 3/O2 will need to
Vodafone and Hutchison agreed to merge, followed in 2010 by
Telstra and Hutchison exiting their network sharing JV a process square the circle between relinquishing/trading spectrum (if required
by the EC), selecting the lowest-cost network sharing JV and
that took until 2012 to complete.
placating its jilted partner. It is looking increasingly unlikely that this
In Ireland in 2011-12, the four MNOs entered into two sharing
deal will proceed due to the opposition of the European Commission
deals: Vodafone with Hutchison (3), and Eircom (Meteor) with
and Ofcom.
Telefnica (O2). In 2014 Hutchison acquired O2 Ireland; one of
13
As with any major programme, there are numerous risks that could materialise
Risk management
throughout the
programme is as
critical as managing
benefits delivery.
Risk
Description
Timing
Mitigation
Regulatory approval
Regulator or competition authority

will not approve
Negotiation
phase
Develop argumentation during Strategy phase and

sound out regulator and competition authority as early
as possible
Competitor objections
Competitor takes legal action to

block deal; most likely to occur in
spectrum pooling option
Negotiation
phase
Develop argumentation during Strategy phase and

sound out regulator and competition authority as early
as possible
Partner conflict
Distrust, lack of respect or

arguments
Strategy or
Negotiation
phases
Ensure both parties objectives are clear and aligned;

analyse cultural fit, etc. during Strategy phase; put
robust governance in place from day one
Change of ownership
Ownership of one party changes

(c.f. Australia, Ireland and UK)
Any phase
Analyse during Strategy phase; ensure that

agreement anticipates possibility; may be reason for a
potential partner not wishing to enter into network
sharing
Loss of competitive
differentiation
Reduces/hinders competitive
differentiation
Any phase
Analyse during Strategy phase to:

Ensure network sharing is not disadvantageous
Provide argumentation for regulator and
competition authority
Proprietary
information leakage
Proprietary strategic information is

passed to competitor
Any phase
Develop confidentiality/security plan at start of

programme and communicate to all parties
Technical
incompatibilities
Many possibilities, e.g., differences

in spectrum bands reduce site
sharing benefits
Strategy
phase
Analyse during Strategy phase to assess suitability of

potential partners
Legacy networks,
systems or contracts
Legacy networks, systems or

contracts complicate or hinder
network sharing leading to a
reduction in sharing benefits
Strategy
phase
Analyse during Strategy phase to assess suitability of

potential partners and benefits of sharing
Inability to manage
customer experience
Breakdown in end-to-end customer

experience management
Any phase
Ensure that governance and systems (OSS/BSS) will

enable desired CEM objectives to be achieved

14
Coleagos approach
Overview of our approach, methodology, deliverables and indicative timescales.

15
3. Coleagos Approach
Overview of Coleagos approach to network sharing

This approach is
applicable
regardless of the
sharing option. It is
designed to work as
well for a tower deal
with a TowerCo as it
does for an active
RAN share with
another MNO.
Phases
Strategy
Negotiation
Transition
Transformation
Responsibility
Prospective Partners
Prospective Partners
Partners and JV
JV
Steps
Internal & external analysis
Obtain regulatory approval
Plan
Depends on scope
Business case
Design To-Be
Transition
Partner engagement
Negotiate Agreement(s)
Conduct due diligence
Project management
Internal and external communications
Deliverables
Business Case
Regulatory approval(s)
Legal entity and financing
Data Room
Target Operating Model

(TOM) design
Staff, assets, contracts,

etc. transferred from
parents
Information Memorandum
(TowerCo only)
Agreement(s)
Transformation (within
parents)
Heads of Agreement
JV operational
Duration
4-5 months
2-5 months but may be

longer dependent on the
regulatory approval
4-6 months
OpEx and CapEx savings

from, e.g.:
Site dismantling
Equipment relocation or
replacement
Subcontract
renegotiation
Months to years
Milestone
Variants on the approach

This approach is applicable regardless of the sharing option. It is
designed to work as well for a tower deal with a TowerCo as it does
for an active RAN share with another MNO.
Examples of how the approach varies:
For sharing with another MNO, the Information Memorandum is
not required as the partner selection is not conducted through a

formal, competitive process
The form of the Agreements referred to in the Negotiation phase
will depend on the sharing option, for example, for a tower deal a
Sale/Purchase Agreement and Master Lease Agreement will be
needed
For some sharing options, the entity referred to in the Transition
and Transformation phases may not be a joint venture; for

example, it may be a subsidiary of a tower company or one of the
MNOs.

16
Strategy phase
The overriding
objectives of the
Strategy phase are
to develop the
Business Case and
sign a Heads of
Agreement with the
preferred partner.
There are two
associated decision
points where the
Board should be
asked to make a
go/no-go decision.
Objectives
Outputs
Set up project (see page 20)
Project and Security Plans
Develop Business Case
Integrated commercial, technical and financial model
Run selection process (TowerCo only)
Business Case
Negotiate and sign Heads of Agreement
Information Memorandum (TowerCo only)
Communicate internally and externally (see page 20)
Heads of Agreement (aka Memorandum of Understanding)

Press releases and staff communications
Activities
The sequence of activities in this first phase depends on when the
two prospective partners make contact. Ideally, do your homework
(i.e., the Business Case) before contacting the preferred partner(s).
Establish the business objectives for network sharing
Agree clear, explicit, documented business objectives that the
company wishes to achieve from network sharing. They may be
revised during the project but they are the fundamental test at each of
the key decision points: will we meet or exceed the objectives?
Internal and external analysis
Before developing a spreadsheet model, there are a number of
important analyses to complete such as:
(electronic) Data Room

Set up the model (design, build and test)
Analyse the model outputs
Evaluate all benefits and risks.
Review and approve the Business Case

Review the Business Case with the project steering group before
obtaining Board or shareholder approval. At this point, there may be
a no-go decision.
Approach the prospective partner(s)
Potential partners (see page 10)
For TowerCos, prepare an Information Memorandum and run a

competitive process to select the best partner. For MNOs, approach
the preferred partner with a high-level proposal based on the internal
Business Case. It is important to get the relationship off to a good
start so the more preparation (i.e., the previously-described activities)
the better.
Risk analysis (see page 14).
Negotiate and sign Heads of Agreement
Quantitative analysis
Negotiate a Heads of Agreement to ensure that the most critical

issues are resolved before entering into detailed negotiations or
contacting the regulator and competition authority, i.e., the next
phase. Again, at this point, there may be a no-go decision.
As-Is analysis (business plan, processes, people, assets,
systems)
Legal and regulatory analysis
Determine the sharing options, scenarios, sensitivities and
payment mechanisms to model

Plan and collect all input data and assumptions; set up the

17
Negotiation phase
Key objectives for
the Negotiation
phase are to
negotiate the JV
agreement and gain
the appropriate
regulatory approval.
Objectives
Outputs
Obtain regulatory approval
To-Be design
Design To-Be entities and prepare Implementation Plan
High-level Implementation Plan
Prepare JV Business Plan and update Business Cases
JV Business Plan
Negotiate and sign Agreement(s)
Updated Business Cases
Undertake appropriate due diligence
Agreement(s)
Press releases and staff communications
Due diligence reports, if required
Activities
Obtain regulatory approval(s)
The process and timing to obtain the necessary regulatory approvals
depends on the sharing option and the applicable local legal and
regulatory framework. In general, it is better to consult the
telecommunications and competition authorities as early as possible
to ensure that the sharing option and agreements take into account
their policies, requirements, etc.
accurate to a high order of magnitude, the project teams now need to

develop a more accurate picture. The accuracy will depend on the
resources and time available: if limited, one approach is to analyse a
number of sample/pilot areas in detail in order to adjust the key
assumptions for the whole in-scope network. Outputs from this
activity include the commercial terms, JV Business Plan and updated
Business Cases.
Design To-Be entities
Negotiate and sign Agreement(s)
A lot of preparatory work is required to develop the details needed for

the Agreement(s). Having agreed on the sharing option in the
Strategy phase, the teams now need to develop the governance
structure, process maps, RACI tables, organisation structures, highlevel job descriptions, KPIs and network/OSS architectures for the JV
and parent companies. This will enable the teams to define interfaces
between the entities, identify the resources (assets, contracts,
people, etc.) to be transferred or procured and prepare the
Implementation Plan.
All the previous activities will enable the appropriate agreements to

be drafted and negotiated, all of which usually takes place in parallel
(see schedule on page 21). Signature will depend on the partners
governance processes; completion will usually be subject to
obtaining final regulatory approval and, if appropriate, completing due
diligence. Again, at this point, there may be a no-go decision.
Undertake appropriate Due Diligence (DD)
The need for a DD and its scope/duration will depend on the sharing
option and what, if anything, is being transferred to the JV.
Prepare JV Business Plan and update Business Cases

Whereas during the Strategy phase the savings estimates are only
18
Transition phase
The overall objective
of this phase is to
get the shared entity
operational. The full
benefits may take
several years to
deliver, which will be
managed against the
JVs Business Plan.
Objectives
Outputs
Set up JV governance and project team (see page 20)
Detailed Implementation Plan
Develop detailed Implementation Plan
Legal entity established
Establish legal entity and initial financing
Staff, assets, contracts, etc. transferred from parents
Transfer staff, assets, contracts, etc. from parents
Operational JV
Transform parent organisations to work with the JV
Post-implementation review(s)

Start JV operation
Activities
Develop detailed Implementation Plan
Implement processes and systems
The Implementation Plan prepared during the previous phase is high

level: sufficient to agree milestones and develop a budget for the JV
Business Plan. Start work on the detailed Implementation Plan as
soon as the partners are confident that they will proceed; at latest
when the JV Agreement is ready for signature.
In accordance with the To-Be design and the JV Agreement,

implement all processes and systems.
For a smooth operational handover from the parents to the JV, it is

important to define how all in-scope assets and activities will be
transferred and at what point the JV takes over responsibility for
meeting KPIs.
Establish legal entity and initial financing
Go through the necessary steps to establish the new legal entity
including providing the initial financing.
Transform parent organisations

Implement the changes to the parent organisations in accordance
with the To-Be design and the JV Agreement. These activities will
take place before or in parallel with the JV set-up activities.
Start JV operation
At this point the JV takes over responsibility for delivering services in
accordance with the SLAs and KPIs set out in the JV Agreement.
Note that there may still be transfer, recruitment, procurement and
implementation activities in progress.
Lease and fit out office(s)

Find suitable offices and fit out ready for staff move.
Transfer or recruit/procure staff, assets and contracts
In accordance with the To-Be design and the JV Agreement,
transfer/recruit staff, transfer/procure all assets and novate/procure
all third-party contracts.
19
Use best-practice project management and communications management throughout

Be clear about the
split of
responsibilities
between the
partners and the JV.
Ensure all activities
are well coordinated,
particularly during
Transition.
Project management
Communications management
Benefits of sound project management
Communication is critical
The benefits of using best-practice project management are generally

understood. In the case of network sharing it is particularly important
in order to:
Network sharing may have a material impact on the Enterprise Value

and therefore all external communications must be managed very
carefully. Similarly internal communications are also highly sensitive
because jobs may be transferred or closed.
Co-ordinate the activities of numerous parties and resources
across three organisations, especially during the Transition phase

Make the most effective use of the CxO team during the Strategy
and Negotiation phases

Manage post-Transition benefits delivery.
Having decided that network sharing is worth investigating, set it up

as a formal project with a steering group, sponsor, manager, Project
Plan, regular (weekly) reporting cycle, etc.
Given the strategic nature of the project, it is extremely important to
prepare a Security Plan and ensure that anyone joining the project
understands it.
Co-ordinated Transition management
Only a few activities need to be co-ordinated between the prospective
partners during the Strategy and Negotiation phases, namely
negotiations, communications (see text at right), internal approvals
and regulatory approvals. However, during the Transition phase
almost all activities must be co-ordinated between the prospective
partners and the JV to ensure it proceeds smoothly. The
Implementation Plan (pages 18 and 19) must clearly define the split
of responsibilities, handover points, etc.
For these reasons, involve senior representatives from Human

Resources (HR) and Investor Relations (IR) from the start of the
project. Legal advice will probably also be required with respect to
applicable employment, telecommunications and financial law.
Co-ordinated communications
It is important to co-ordinate communications at a fine level of detail:
the wording and timing of communications must be
exchanged/agreed (subject to legal constraints) between the two
partners and, once it is established, the JV.
Prepare and maintain a Joint Communications Plan
Prepare a Communications Plan at the start of the project and
maintain it through all the phases. It should cover all stakeholders
and all proactive/reactive, internal/external communications activities.
Prior to signing the Heads of Agreement, work with the prospective
partner to extend the Communications Plan to include their
stakeholders and communications activities, i.e., a Joint Plan.
Key milestones for internal and external communications are:
Heads of Agreement signature
JV Agreement signature
JV Agreement completion following regulatory approval and DD
JV operational usually an internal communication only.

20
Indicative project schedule

Typically, it takes
between 9 and 15
months to get the JV
operational.
The Transformation
phase (not shown)
may take several
years to deliver all
the savings.
Month
10
11
12
15
Strategic analysis
Business case
BC approval (go/no-go)
HoA approval (go/no-go)
Partner engagement
Regulatory approval
To-Be design
JV approval (go/no-go)
Agt. negotiation
Due diligence
Plan
JV operational
Transition
Early schedule
Late schedule
Milestone
Key factors that determine the project schedule
Transformation phase (not shown)
The schedule depends mainly on the following:
The Transformation phase might be able to start in parallel with the

Transition phase. In particular it should be possible to start the design
work to determine exactly how to rationalise sites.
Scope of the sharing

Need to transfer assets
Willingness/ambition of the partners.
During the previous phases, the teams should have worked out the
optimal rate at which to undertake the transformation. In all likelihood,
it may take several years to complete this phase.

21
Coleagos experience and services

During the last decade our consultants have built up experience across most types of
sharing deals and phases. We provide a complete range of services to support or lead
your project team.

22
4. Coleagos Experience and Services
Our consultants have built up experience across most types of sharing deals and project phases
In addition to
working on every
type of sharing deal
for MNOs, Coleagos
consultants have
also worked for
regulators and the
ITU to bring
regulatory
frameworks up to
best practice.
Region
Sharing
Option
Description
Global
All
On behalf of the Communications Regulators Association of Southern Africa (CRASA) and the International
Telecommunications Union (ITU) developed the ICT and Broadcasting Infrastructure Sharing Guidelines for
the Southern African Development Community (SADC) countries (though applicable anywhere in the world).
Europe
All
Developed this operators 2G, 3G and 4G technology strategy including network sharing, equipment
sourcing and managed services. The project evaluated all possible sharing options and identified the two
most attractive dependent on subsequent expected regulatory events.
Europe
Active
Modelling of the active network sharing options including alternative commercial terms to help this client
decide its network sharing strategy before entering into negotiations.
Europe
Passive
(TowerCo)
Carried out a market and technical analysis for the potential creation of a mobile network towers and
infrastructure sharing business in a major European market.
Asia
Active
As part of several spectrum valuation projects, evaluated the impact on Enterprise Value of different network
sharing options.
Africa & Asia Active
For the GSMAs Connected Society programme, developed the Infrastructure Economics Toolkit to help
governments and MNOs understand the infrastructure sharing options and fiscal measures needed to
provide rural/remote broadband access to 100% of the population.
Europe
Passive
Appointed to act as the independent mediator for a passive, antennae and transmission sharing deal. Work
included preparation of the joint business case and a draft heads of agreement.
Middle East
& Africa
Active (MOCN Provided expert support for the Business Case development and JV Agreement negotiation for a 3G and 4G
and roaming) MOCN network share and 2G roaming.
Europe
Passive
(TowerCo)
Analysed the passive network sharing options for this mobile operator. Working with the clients legal and
financial advisers, developed the Information Memorandum and drafted the services schedule for the Master
Agreement.
Europe
Active
Led the technical and commercial activities to develop the relevant JV Agreement schedules for a 3G active
network share in a major European market.
Middle East
& Africa
Passive
(TowerCo)
Technical and commercial due diligence of tower portfolios in Tanzania, Ghana, South Africa and Uganda.
Reviewed the purchasers business plans and carried out detailed review of the site portfolio to assess
attractiveness to local market demand.
23
4. Coleagos Experience and Services
We provide a complete range of services to support or lead your project team

Coleago can help
throughout the
project at all levels.
Our consultants
become part of your
project team.
Our methodology
includes templates
and tools based on
our experience
which increase the
teams efficiency and
reduce risk.
Phase
Service
Description
Strategy
Business Case
Internal and external analysis including As-Is (business plan, processes, people, assets,
systems), legal and regulatory, potential partners and risks. Quantitative analysis including
commercial, technical and financial modelling. Business Case and Board presentation
preparation.
Info. Memorandum
(TowerCos)
Information Memorandum preparation (with your legal or financial advisors). Evaluation process
design and execution. Board presentation preparation.
HoA negotiation
Negotiation team training. Draft HoA (with your legal or financial advisors). Establish internal
position on key terms. Lead or support negotiations. Board presentation preparation.
Regulatory support
Internal briefing document preparation. Presentations/papers preparation for submission to the

regulatory authorities in support of requests for approvals.
To-Be design
Design of the governance structure, process maps, RACI tables, organisation structures, highlevel job descriptions, KPIs and network/OSS architectures for the JV and parent companies.
Implementation
Planning
High-level and detailed Implementation Plans (WBS, schedule, resources and costs).
JV Business Plan
Commercial terms analysis (in support of negotiation). Business Case update. JV Business
Plan preparation.
Agreement
negotiation
Negotiation team training. Draft Agreement(s) (with your legal or financial advisors). Lead or
support negotiations. Board presentation preparation.
Due diligence
Commercial and technical due diligence.
Transformation
RAN rationalisation
Lead or support the site or RAN rationalisation.
Any Phase
Project
management
Project set-up: governance, Project Plan and reporting cycle. Project management of any phase
including Transition.
Communications
support
Communications planning support to your HR and IR managers. Assistance with drafting Press
Releases and internal communications.
Expert advice
Expert advice to the Board and CxO team. Knowledge transfer to the project team.
Negotiation

24
Why Coleago?
The key benefits of working with Coleago.

25
5. Why Coleago?
The benefits of working with Coleago

Coleagos Differentiator
Project Impact
Overall Benefits
Quickly able to establish credibility and respect
with all stakeholders

Highly Experienced
Consultants
Confidence to challenge the teams thinking

Project delivery is fast, efficient and accurate
Able to remain objective
Able to identify the key challenges quickly
Network Sharing
Specialists
We already know how to tackle the challenges
so more time can be spent on getting the detail

correct
Increased confidence
Reduced risk
Time is not wasted working out how to do things
Optimised Methodology
and Tools
The use of existing tools reduces the need for
modelling and so reduces risk
Increased efficiency
Value for money
More time can be spent on strategy and
developing and agreeing assumptions
The management team takes ownership
Collaborative Approach
Project team learns from Coleago
Project team works at maximum efficiency

26
Appendix A
Connecting the Unconnected: Rural/Remote Broadband Initiatives

27
Appendix A
Making sense of the plethora of global initiatives public bodies

There are 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
dont have access to
the Internet.
Public Bodies
UN:
2030 Sustainable Development Goals (SDGs):
Goal 9: build resilient infrastructure, promote sustainable

industrialization and foster innovation
Target: Significantly increase access to information and

communications technology and strive to provide universal and
affordable access to the Internet in least developed countries
by 2020
World Summit on the Information Society (WSIS)
Organised annually by ITU, UNESCO, UNDP and UNCTAD
Plan of Action: 12 Action Lines; C2 is Infrastructure
ITU:
Connect the World: conference series focused on the
implementation of the connectivity targets from the UN's World

Summit on the Information Society (WSIS) and the Regional
Initiatives adopted by Member States at the ITU's World
Telecommunication Development Conference (WTDC) (every 4
years, last one in 2014)
ITU & UNESCO: Broadband Commission for Sustainable

Development
Following adoption of the UN's SDGs in Sep 2015, the
Commission was re-launched as the Broadband Commission for

Sustainable Development to showcase and document the power
of ICT and broadband-based technologies for sustainable
development
Six focus areas:
Economy and finance
Social development
Post 2015 development agenda
Environment and climate change
Education and science
Broadband advocacy
World Bank Group: Broadband Access for All

Two goals by 2030:
End extreme poverty by decreasing the percentage of people

living on less than $1.90 a day to no more than 3%
Promote shared prosperity by fostering the income growth of

the bottom 40% for every country
Connect 2020 Agenda has four goals:
Growth
Inclusiveness: bridge the digital divide and provide broadband

for all
Sustainability
Innovation
ICT sector strategy has three action areas:
Transformation
Connectivity: scaling up affordable access to broadband

for all
Innovation

28
Appendix A
Making sense of the plethora of global initiatives NGOs

Non-Governmental Organisations (NGOs)
World Economic Forum (WEF): Internet for All
ONE:
WEF:
International campaigning and advocacy organisation of more than
7 million people
Established in 1971 as a not-for-profit foundation
Headquartered in Geneva
Focused on the UN SDGs
independent, impartial and not tied to any special interests
Digital Impact Alliance (DIAL):
10 Global Challenge Initiatives, one of which is "Future of the
Internet".
Consists of four projects, one of which is "Internet for All"
Objective: develop a scalable, replicable new model of public-
private collaboration that accelerate internet access and adoption

for the 4 billion people currently not on the internet
Includes the UN Foundation, Bill & Melinda Gates Foundation,
USAID, etc.
DIALs mission is to accelerate the collective efforts of
government, industry and development organizations to realize the

vision of a more inclusive digital economy for the underserved in
emerging markets
Two phases:
Internet for All report (2015)
Country programmes (2016 onwards)
Rwanda, Kenya, Uganda and South Sudan
Additional country programmes (up to three in total) in other

regions of the world (Asia, Latin America)
Alliance for Affordable Internet (A4AI)

Global coalition working to make broadband affordable for all
Currently working in six countries Nigeria, Ghana,
Mozambique, Liberia, Myanmar and the Dominican Republic to

make Internet more affordable and accessible for nearly 300
million people. In each of these countries, weve signed formal
memoranda of understanding with the government, and have
worked with a wide range of in-country stakeholders to build
strong national multi-stakeholder coalitions. These national
coalitions work to develop solutions tailored to local realities, and
lead efforts in their country to realise more affordable access.
Research and international advocacy
29
Appendix A
Making sense of the plethora of global initiatives commercial entities

Commercial Entities
GSMA:
Mobile for Development - Connected Society programme has
four work streams:
Affordability
Infrastructure economics
Digital literacy
Locally-relevant content
Facebook: Internet.org
Free Basics offers access to basic websites for local audiences
Connectivity Lab developing ways to make affordable internet
access possible in communities around the world
Aquila unmanned aircraft
Express Wi-Fi working with carriers, ISPs and local entrepreneurs
to help expand connectivity to underserved locations

Innovation Lab, an Ericsson-Facebook collaboration, helps
developers understand how their apps work in different parts of

the world
Alphabet: Project Loon
Network of balloons traveling on the edge of space, designed to
connect people in rural and remote areas, help fill coverage gaps,
and bring people back online after disasters

30
Appendix B

31
Appendix B

MNO Network Sharing Deals by Region (2001-15)
Database (charts above and tables on following pages)

Coleagos database is based on public announcements by MNOs. It
includes passive and active sharing deals between MNOs and tower
JVs with, or sales to, TowerCos. It excludes M&A, national roaming,
transmission-only and informal or unannounced site sharing deals.
Network Sharing Experience by Group (end-2015)
Coleagos Sharing Indexes by Region (end-2015)
Note that the Date column in the following tables is the date that the
deal was announced. The completion date may be different.
Regional Indexes (see chart at right)
As the number of countries and MNOs differ considerably between
regions, Coleago has developed two indexes in order to compare the
status of network sharing. The TowerCo Index is calculated by
dividing the number of sale-and-leaseback deals by the total number
of MNOs in the region. The MNO Sharing Index is calculated by
dividing the number of passive/active sharing deals by the number of
MNOs and multiplying by two. In both cases, the index may exceed
100 depending on the industry structure within a country.
32
Appendix B
Americas (1 of 2)
The network sharing
picture in the
Americas has been
dominated by
TowerCo deals (over
70%) to the extent
that the region is on
a par with the MEA
region on the
TowerCo Index.
Country
MNO1
MNO2
Canada
Bell Mobility
Telus
Active (MORAN)
Oct-08
Jamaica
LIME
Amrica Mvil (Claro)
Passive
Jul-09
Canada
Rogers
Videotron
Active (MORAN)
Jul-09
Canada
Rogers
Manitoba Telecom
Active (MORAN)
Jul-09
Canada
Bell Mobility
SaskTel
Active (MORAN)
Oct-09
Chile
Telefnica (Movistar)
ATC
TowerCo
Jul-10
Colombia
MIC (Tigo)
ATC
TowerCo
Jul-11
However it is still
early days as these
deals have only
taken place in five
countries (Brazil,
Chile, Colombia,
Mexico and USA).
Mexico
ATC
TowerCo
Dec-11
Chile
ATC
TowerCo
Jan-12
Brazil
Telefnica (Vivo)
SBA
TowerCo
Jan-13
Brazil
Oi
TIM Brasil
Active (MORAN)
Mar-13
Brazil
Telefnica (Vivo)
Amrica Mvil (Claro)
Active (MORAN)
Mar-13
Colombia
MIC (Tigo)
Active (MORAN)
Aug-13
An even greater
opportunity is active
sharing between
MNOs where the
only deals to date
have been in
Canada, Colombia
and Brazil.
Brazil
NII
ATC
TowerCo
Aug-13
Mexico
AT&T [formerly Nextel]
ATC
TowerCo
Aug-13
USA
AT&T
Crown Castle
TowerCo
Oct-13
Brazil
Oi
SBA
TowerCo
Dec-13
Brazil
Oi
SBA
TowerCo
Jun-14
Venezuela
Movilnet
Digitel
Passive
Oct-14
Brazil
TIM Brasil
ATC
TowerCo
Nov-14
TowerCo or MNO3
Deal Type
Date

33
Appendix B
Americas (2 of 2)
Country
MNO1
USA
MNO2
TowerCo or MNO3
Deal Type
Date
US Cellular
Vertical Bridge Holdings
TowerCo
Dec-14
USA
nTelos Wireless
Grain Management
TowerCo
Jan-15
USA
Verizon
ATC
TowerCo
Feb-15

34
Appendix B
Europe (1 of 2)
Europe has gone the
furthest in terms of
depth of sharing
with 17 active
(MORAN and
MOCN) sharing
deals to date but has
been the laggard
when it comes to
TowerCo deals. With
no sharing of any
form in half of
Europe, there is still
some way to go.
Country
MNO1
MNO2
TowerCo or MNO3
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
Italy
Vodafone Italia
TIM
Passive
Nov-07
United
Kingdom
T-Mobile UK [now EE]
Hutchison (3)
Active (MORAN)
Dec-07
Germany
Vodafone Germany
Telefnica (O2 Germany)
Passive
Mar-09
Spain
Vodafone Spain
Passive
Mar-09
Ireland
Vodafone Ireland
Telefnica O2 Ireland
[now Hutchison (3)]
Passive
Mar-09
Sweden
Tele2
Telenor Sweden
Active (MOCN)
Apr-09
Italy
TIM
Hutchison (3)
Passive
Jul-09
Belgium
Orange (Mobistar)
KPN (BASE)
Passive
Oct-09
Czech
Republic
Telefnica O2 [now O2
Czech Republic]
T-Mobile CR
Active (MORAN)
Feb-11
Ireland
Hutchison (3) [formerly

Telefnica O2 Ireland]
Eircom (Meteor)
Passive
Apr-11
Denmark
TeliaSonera Denmark
Telenor Denmark
Active (MOCN)
Jun-11
Poland
T-Mobile (PTC)
PTK Centertel [now

Orange Polska]
Active (MORAN)
Russia
Rostelecom
MTS
Passive
Feb-12
United
Kingdom
Vodafone UK
Telefnica (O2 UK)
Active (MORAN)
Jun-12
Jul-11

35
Appendix B
Europe (2 of 2)
Country
MNO1
MNO2
Ireland
Vodafone Ireland
Hutchison (3)
France
Bouygues
Netherlands
KPN
Greece
Vodafone Greece
Romania
TowerCo or MNO3
Deal Type
Date
Passive
Jul-12
Antin IP
TowerCo
Nov-12
Protelindo
TowerCo
Nov-12
Wind Hellas
Active (MORAN)
Jun-13
Vodafone
Orange
Active (MORAN)
Aug-13
Spain
TeliaSonera (Yoigo)
TowerCo
Aug-13
Netherlands
T-Mobile
Tele2
Passive
Sep-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
Italy
Vimplecom (Wind)
Abertis
TowerCo
Mar-15
Finland
Ukko Mobile
Digita
Passive
Dec-15
Abertis

36
Appendix B
Middle East & Africa (1 of 2)

Africa leads the
world in TowerCo
deals; the regional
Index being pulled
down from 17 to 13
because of the lack
of deals in the
Middle East. Three
multinational
operators, Millicom
(Tigo), MTN, and
Airtel, account for
more than 80% of
the deals.
Country
MNO1
MNO2
TowerCo or MNO3
Deal Type
Iran
MCCI
Irancell
Taliya
Passive
Jan-07
Qatar
Qtel [now Ooredoo]
Vodafone Qatar
Passive
Mar-09
Ghana
MIC (Tigo)
Helios
TowerCo
Jan-10
South Africa
Cell C
ATC
TowerCo
Nov-10
Ghana
MTN
ATC
TowerCo
Dec-10
Nigeria
Starcomms
SPAN
TowerCo
Dec-10
Tanzania
MIC (Tigo)
Helios
TowerCo
Dec-10
DRC
MIC (Tigo)
Helios
TowerCo
Dec-10
Uganda
MTN Uganda
ATC
TowerCo
Dec-11
Uganda
Orange
Eaton
TowerCo
Mar-12
Uganda
Warid [now Airtel]
Eaton
TowerCo
Mar-12
Cte d'Ivoire
MTN
IHS Holding
TowerCo
Oct-12
Cameroon
MTN
IHS Holding
TowerCo
Oct-12
Rwanda
Rwanda Development
Board
KT Corp
Open Access
Mar-13
Tanzania
MIC (Tigo)
Vodafone (Vodacom)
Israel
Partner (Orange)
Israel
Partner (Orange)
Rwanda
MTN
Zambia
MTN
Helios
Date
TowerCo
Jul-13
Golan
Passive
Oct-13
HOT Mobile
Active (MOCN)
Nov-13
IHS Holding
TowerCo
Dec-13
IHS Holding
TowerCo
Dec-13

37
Appendix B
Middle East & Africa (2 of 2)

Similar to the
Americas, there are
still more than 30
African countries
without TowerCos
and an even bigger
opportunity for active
sharing between
MNOs.
Country
MNO1
DRC
With the exception of

Israel, Middle
Eastern operators
have yet to embark
on the TowerCo or
network sharing
journey.
MNO2
TowerCo or MNO3
Deal Type
Airtel
Helios
TowerCo
Jul-14
Republic of
Congo
Airtel
Helios
TowerCo
Jul-14
Nigeria
Etisalat Nigeria
IHS Holding
TowerCo
Aug-14
Nigeria
MTN Nigeria
IHS Holding
TowerCo
Sep-14
Israel
Cellcom
Golan
Active (MOCN)
Sep-14
Israel
Cellcom
Pelephone
Passive
Sep-14
Egypt
Orange (MobiNil)
Eaton
TowerCo
Nov-14
Nigeria
Airtel
ATC
TowerCo
Nov-14
Rwanda
Airtel
IHS Holding
TowerCo
Dec-14
Zambia
Airtel
IHS Holding
TowerCo
Dec-14
Tunisia
Ooredoo Tunisia
Active (MORAN)
Oct-15
Burkina Faso
Airtel
TowerCo
Oct-15
Tunisie Telecom
Eaton
Date

38
Appendix B
Asia Pacific (1 of 2)
Asia Pacific stands
out for its passive
sharing between
MNOs but the Index
is exaggerated by
the multiplicity of
deals in Bangladesh
and India.
Country
MNO1
MNO2
Australia
Vodafone Hutchison
Australia
Pakistan
TowerCo or MNO3
Deal Type
Date
Optus
Active (MORAN)
Aug-04
PTCL (Ufone)
Telenor Pakistan
Passive
Jul-07
India
Airtel (Bharti Infratel)
Essar [now Vodafone]
Passive
Dec-07
Indonesia
Axiata (XL)
Hutchison (3)
Passive
Dec-07
New Zealand
Vodafone NZ
NZ Communications
Passive
Oct-08
Vietnam
Viettel [formerly EVN

Telecom]
Hanoi Telecom
(Vietnamobile)
Active (MOCN)
Apr-09
India
Aircel
Datacom Solutions [now

Videocon]
Passive
Sep-09
India
BSNL
Tata Teleservices
Passive
Oct-09
India
BSNL
Aircel
Passive
Oct-09
Bangladesh
Axiata (Robi)
Warid [now Airtel]
Passive
Oct-09
India
BSNL
Datacom Solutions [now

Videocon]
Passive
Oct-09
India
BSNL
MTS (SSTL)
Passive
Nov-09
Bangladesh
Vimpelcom (banglalink)
Telenor (Grameenphone)
Passive
Feb-10
Bangladesh
Axiata (Robi)
Passive
Feb-10
India
Essar [now Vodafone]
TowerCo
Feb-10
Bangladesh
Warid [now Airtel]
Citycell
Passive
Apr-10
Hong Kong
PCCW
Hutchison (3)
Active (MOCN)
Oct-10
Bangladesh
Warid [now Airtel]
Passive
Nov-10
Idea Cellular
ATC

39
Appendix B
Asia Pacific (2 of 2)
Although the
TowerCo Index is as
low as Europe, the
segment is expected
to grow rapidly with
a number of
operators such as
Axiata (Malaysia,
Bangladesh, etc.)
establishing their
own captive tower
businesses and
TowerCos such as
American Tower and
Viom expanding into
India and Myanmar
respectively.
Similar to the
Americas and MEA,
active sharing still
leaves huge
potential.
Country
MNO1
MNO2
Malaysia
Celcom
DiGi
Passive
Jan-11
Pakistan
PTCL (Ufone)
Vimpelcom (Mobilink)
Passive
Apr-11
Pakistan
Telenor Pakistan
Vimpelcom (Mobilink)
Passive
May-11
Malaysia
Maxis
U Mobile
Active (MORAN)
Oct-11
Thailand
AIS
TOT
Passive
Jan-12
Malaysia
Maxis
REDTone
Active (MOCN)
Bangladesh
Axiata (Robi)
Teletalk
Passive
Jan-13
Azerbaijan
Bakcell
Azerfon
Active (MOCN)
May-13
India
RCOM
Reliance Jio
Passive
Jun-13
Malaysia
Celcom
Puncak Semangat (Altel)
Active (MOCN)
India
Airtel
Reliance Jio
Passive
Dec-13
Bangladesh
Airtel (formerly Warid)
Teletalk
Passive
Feb-14
China
China Mobile
China Telecom
Passive
Jul-14
Papua New
Guinea
Telikom PNG
bmobile
Active (MORAN)
Aug-14
India
BSNL
Reliance Jio
Passive
Aug-14
Indonesia
Axiata (XL)
Solusi Tunas Pratama

(STP)
TowerCo
Oct-14
Indonesia
Telkom Indonesia
Tower Bersama
Infrastructure (TBI)
TowerCo
Oct-14
Pakistan
Warid
TowerShare
TowerCo
Apr-15
Thailand
AIS
Passive
Aug-15
DTAC
TowerCo or MNO3
China Unicom
Deal Type
Date
Jul-12
Jul-13

40
Appendix C
Tower Companies

41
Appendix C
Multinational tower companies

Name
HQ
Shareholders
Towers
Markets
American Tower
US
Publicly quoted
143,000
Cellnex Telecom
ES
Publicly quoted
15,000
Italy and Spain
e.co
MY
Private. Axiata
16,000
Bangladesh, Cambodia, Malaysia, Myanmar and Sri Lanka
Eaton Towers
GB
Private
5,000
Burkina Faso, Egypt, Ghana, Kenya, Malawi, Niger, South

Africa and Uganda
Helios Towers
Africa
GB
Private. Key investors: Albright

Capital, IFC, Quantum.
5,500
Chad, Congo, DRC, Ghana and Tanzania
IHS Group
GB
Private. Key investors: Goldman

Sachs, IFC, ECP, Investec.
23,300
Cameroon, Cte d'Ivoire, Nigeria, Rwanda, Zambia
SMN (Protelindo)
ID
Publicly quoted
12,200
Indonesia and Netherlands
Brazil, Chile, Colombia, Costa Rica, Mexico, Peru, USA,

Germany, Ghana, Nigeria, South Africa, Uganda, India
Note that there are numerous tower companies who only have a presence in one market. Some of these companies, e.g., Arqiva, Bharti
Infratel, Crown Castle, Indus Towers, TDF, Viom, etc., have large tower portfolios and in some cases have expressed an ambition to expand
internationally.
The number of towers is correct as of end-2015 and includes both owned and managed sites.

42
Appendix C
Tower/site sharing through third-party tower companies

Some of the early
tower sharing deals
were driven by the
desire to release
capital by selling
assets to tower
companies.
However, there is
the risk of creating a
tower monopoly
Business rationale for tower companies
Renting tower space
Saddled with the high cost of 3G licences and the cost of 3G build
out, many mobile operators sought to release capital from the sale of
their tower assets. This also had advantages from the stock market
perspectives since the telecoms business and the tower business
were valued on a different basis. Mobile telecoms operators are
deemed to be growth stocks whereas the tower business is based on
predictable, stable cash flow.
The rent or lease prices mobile network operators have to pay to

tower companies depend on a number of factors.
The communication tower or mast business is a large business

dominated by infrastructure and or real estate orientated companies
as opposed to technology companies. For example Crown Castle
International Inc. and American Tower Corp. are the dominant
independent tower companies in the USA.
More recently, tower companies also moved into the transmission
space, benefitting from the growth in demand for backhaul as a result
of increase mobile data traffic.
The features that make the tower business attractive to investors are:
Restrictions in granting building permits may create a local
monopoly. It is this which also makes it risky for operators to sell

their tower assets to a dominant supplier.
Long-term contracts are the norm.
High switching costs result in high renewal rates.
Location and availability of alternatives are a significant issue. As
with the real estate business what matters is location, location,

location.
In some cases operators share in the construction cost in
exchange for a rent reduction.

Volume discounts are common as are discounts for a long term
commitment.
The risk of creating a tower/site monopoly
In countries where operators have sold towers and rooftop sites to
third-party operators, they have effectively created a monopoly with
control over an essential facility.
In many countries, it is difficult or impossible to build new sites as site

build authorisations are refused. This means the only option is to go
onto an existing site owned by a site or tower company. In some
markets independent site companies control virtually all sites in a
given area. This means the mobile operators become price takers in
a monopoly market. For example in the UK, this has had some
negative impact on operating costs and led to litigation.
Most of the OpEx is fixed.

The combination of predictable revenue and OpEx results in a
steady cash flow.

Tower companies have low borrowing costs because they can
offer towers as collateral.

43
Appendix D
About Coleago

44
Appendix D
A leading boutique telecommunications consulting and training firm

Based in the UK
Coleago provides
consulting and
training services to
global and regional
telecoms, media and
technology players
Operators and regulators

Telecoms operators around the world trust Coleago to
provide insight and advice on key strategic and commercial
issues through our broad range of consulting and training
services.
Partner
Senior
Managers
Experience-based consulting approach

We do not use inexperienced associates or analysts all our
consultants have a minimum of 10 years experience and
most have over 15 years, often at board level in operational
businesses. Our insight and advice is therefore based on
practical experience and proven processes and
methodologies developed over many years. Clients can be
confident that their project will be delivered by Partner and
Senior Manager level consultants from start to finish and our
solutions and recommendations will be credible, relevant,
realistic and practical.
Manager
Traditional
Consulting Firm
Model
Senior Consultant
Junior Consultant
Analyst
Developed and developing market experience

Coleago has worked with clients in developed markets and
also in some of the most challenging emerging markets
including the Yemen and the Sudan and we have launched
and operated GSM businesses in countries such as Algeria.
Small, effective teams
Advice covering a broad range of technologies
Our consultants are highly experienced, multi-skilled and

have extensive project management experience. This allows
Coleago to deploy smaller teams as we do not require the
hierarchy of traditional consultancies to manage large teams
of juniors. Clients find our small teams easier to work with
and integrate into their own project teams.
We have advised clients on wireless, fixed, cable, satellite and fibre based
technologies. We have specialist expertise in spectrum valuations and
spectrum auctions have participated in more than 50 awards since 1994.
Exceptional value
By eliminating many of the overheads of traditional firms we
are able to offer end-to-end partner level consulting at fee
rates that provide exceptional value.
Media and technology experience

We have developed strategies and business plans for media companies, TV
channels and web based businesses as well as technology companies.
Innovative training services
Coleago has developed a range of training and management development
programmes, including a War Game (business simulation)

45
Appendix E
Contacts

46
Appendix E
Contacts
Stefan Zehle
Graham Friend
CEO
Managing Director
Tel: +44 7974 356 258
Tel: +41 79 855 1354
stefan.zehle@coleago.com
graham.friend@coleago.com
Scott McKenzie
Chris Buist
Director
Director
Tel: +44 7825 294 576
Tel: +43 664 352 1068
scott.mckenzie@coleago.com
chris.buist@coleago.com
Further information: www.coleago.com

47

Coleago Networksharingoverviewv011100215cb 150212042055 Conversion Gate01 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Coleago Networksharingoverviewv011100215cb 150212042055 Conversion Gate01 PDF

Uploaded by

Copyright:

Available Formats

Mobile Network Infrastructure Sharing

Industry overview and Coleagos approach

Chris Buist, Director

Network sharing has grown rapidly since 2009

First-mover advantage operators need to act

Internal & external

JVs between MNOs and tower sale-and-leaseback deals have taken

copyright Coleago 2016

Industry Status, Trends and Drivers

Potential Solutions, Benefits and Risks

Coleagos Experience and Services

Connecting the Unconnected: Rural/Remote Broadband Initiatives

Network Sharing Database and Regional Indexes

copyright Coleago 2016

Industry status, trends and drivers

copyright Coleago 2016

1. Industry status, trends and drivers

Network sharing has grown rapidly since 2009

copyright Coleago 2016

1. Industry status, trends and drivers

Current and future trends in mobile network sharing

copyright Coleago 2016

1. Industry status, trends and drivers

Drivers: EBITDA pressure, spectrum scarcity and government policy

What is driving the huge increase in sharing, tower sales and

Connecting the unconnected: making sense of the initiatives

EBITDA pressure from competition and the data tsunami

Spectrum scarcity will be a driver in some markets

EBITDA: Earnings Before

implementation progress to date are mixed to say the least. Similarly,

tax changes, licence/spectrum fee reductions, USF funding, etc.)

Potential solutions, benefits and risks

copyright Coleago 2016

2. Potential solutions, benefits and risks

The five dimensions of network sharing technology scope

It is all too easy to jump to a solution without considering all the

If the shareholders and management team are open-minded, then the

2. Potential solutions, benefits and risks

If the two potential partners are about to invest in new RAN

and broadband speed) taking into account features such as

for competitive reasons

As mobile data traffic continues to grow, regulators will be pressured

Undoubtedly active sharing provides the greatest total savings.

The five dimensions of network sharing architectural scope

copyright Coleago 2016

2. Potential solutions, benefits and risks

Urban areas usually present more valuable opportunities than rural

and 15% of the population

There may only be a few potential MNO partners or tower companies

differentiation (including brand)

technologies, vendors and MS providers

management styles, corporate values, etc.

shareholder ambitions, etc.

Greece: Vodafone and Wind is rural and limited selected urban

areas, equating to 70% of rural and 40% of urban population

2. Potential solutions, benefits and risks

The five dimensions of network sharing sourcing

JV outsources geographically to Partners

For active sharing and some passive sharing deals, a 50:50 JV is

responsible for overall design authority, programme

copyright Coleago 2016

2. Potential solutions, benefits and risks

Ultimately network sharing is driven by the need to maximise Enterprise Value