Wholesale access networks are a crap idea: GSMA report

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The GSMA has issued a new report which found that wholesale access networks for mobile services are generally flops, and that network competition is much more likely to drive market growth and innovation.

The report, “Wholesale Open Access Networks”, examines the performance of the wholesale open access network (WOAN) model (also known as “single wholesale network” or SWN) in five markets around the world: Kenya, Mexico, Russia, Rwanda and South Africa.

The report, which follows up on a 2014 study that assessed the potential economic case for implementing the wholesale network model, found that in the countries examined, only one wholesale network was rolled out, with all other markets plagued by slow progression and delayed and/or cancelled launches.

“Policymakers in countries considering a move to a wholesale open access network for 4G services may believe they can achieve greater network coverage compared with models that rely on network competition. However the research published today demonstrates that this is not the case,” said GSMA chief regulatory officer John Giusti. “We have found that network competition produces faster and more extensive network coverage, and the examples highlighted in the report indicate little evidence that a SWN/WOAN is likely to achieve this.”

By contrast, says the GSMA, the traditional competitive network structure – in which mobile licenses are handed out to a limited number of competing mobile network operators, usually under private ownership – has resulted in unprecedented growth and innovation in mobile services. For evidence, the GSMA offers its own stats: more than 5 billion mobile users globally, including 3.8 billion people in developing countries, providing access to tools and applications that address a wide range of socioeconomic challenges, etc.

The GSMA report notes that its criticism of wholesale infrastructure doesn’t exclude co-operation in infrastructure investment – for example, infrastructure sharing agreements – so long as such arrangements are voluntary. The report is more critical of wholesale networks designed as a facilities-based monopoly, says Giusti.

“We are concerned that a move to wholesale networks will harm consumers, as history has demonstrated that network monopolies normally result in high prices and lower investment in infrastructure,” he said. “With this in mind, we call upon governments looking to implement a SWN or WOAN to instead support the ability of mobile operators to enter into infrastructure sharing agreements on a voluntary basis and consider how they can apply market-friendly spectrum assignment methods to maximise coverage, using appropriate spectrum license conditions to extend mobile services to underserved areas.”

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