LONDON –The high cost of erecting and running cellular communications towers has driven many operators towards leasing arrangements in recent years. Currently about 17% of all towers are leased, but ABI Research expects the number to rise to about 25% in 2015.
“RAN sharing is quite the fashion in Europe”
This trend is most pronounced in the United States and in India (where it is driven by low ARPUs and high levels of competition), but according to practice director Aditya Kaul, “Although they are still embryonic markets, Latin America and Africa offer the greatest potential for growth in cellular tower leasing.”
Leasing markets are being driven forward by competitive pressure to cut operating costs and to keep up with the pace of innovation in services. The model of offloading tower ownership (earning revenue from that), and letting third parties do the management has proven very successful in both India and the US.
The Indian tower company Bharti Infratel is eyeing African markets, while American Tower is acquiring assets in South America and in India itself. Other major players include Indus Towers (the world’s largest tower company with about 44,000 sites), and Crown Castle in the US.
While tower leasing is not unknown in the Asia-Pacific region, it is impeded in two of the largest potential markets – China and Japan – by regulatory issues.
In Europe, the pattern is somewhat different: there are few tower operators there, and typically operators hesitate to share towers if that risks losing their competitive advantage in terms of coverage. A more popular model for operators is RAN sharing, particularly in Scandinavia. “RAN sharing is quite the fashion in Europe,” says Kaul, “because the cost of a new site is one of the highest in the world. According to ABI Research estimates, a shared network in Europe can deliver more than $400K in CAPEX savings per site.”
ABI Research’s “Mobile Network Towers and Rooftop Sites” study (http://www.abiresearch.com/research/1003808) provides profiles of each world region to illustrate the emergence of tower and rooftop leasing, site infrastructure sharing, and RAN sharing. Market drivers are explored in detail, and the report provides forecasts through 2015.
It is part of the Mobile Networks Research Service (http://www.abiresearch.com/products/service/Wireless_Infrastructure_Research_Service)
ABI Research provides in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 30+ research and advisory services. Est. 1990. For more information visit www.abiresearch.com, or call +1.516.624.2500.