Mobile operators urged to join forces
Legacy GSM networks are ageing as UMTS is increasingly becoming the technology of choice for most mobile subscribers. UMTS is also poised to take over the 900 MHz band from GSM. But what is the right strategy for phasing out GSM? “Operating only one network is the key to increasing earnings,” say the strategy consultants at Omnitele.
New figures from the mobile strategy consultants of Omnitele suggest that mobile network operators can save greatly on operating costs by operating a single combined GSM & UMTS network. And lower operating costs translate directly to higher earnings. This should be welcome news to many network operators at a time of financial crisis.
“A move to a combined GSM & UMTS network can lead to lower cumulative network costs and better utilization of network investments as early as 2012 for some operators,” says Pal Zarandy, Principal Consultant of Omnitele. He also states that new radio infrastructure technology in the form of single base station units supporting both GSM & UMTS technologies is instrumental lowering operational costs.
Complete phase-out of GSM is unlikely to bring any financial gains before 2015. “It is to consider phasing out the old GSM technology altogether in favour of UMTS and UMTS900. But our techno-economic models show that the incremental cost of expanding coverage as well as handset issues would make it a costly proposition at this time,” says Mr Antonios Drossos, VP of Business Consulting at Omnitele.
He also points out that the right strategy and timing for the phasing out of GSM depends heavily on local market and regulatory conditions, and need to be carefully evaluated prior to any decision.
Particularly the availability and penetration of UMTS900 handsets is a showstopper for the full phase out of GSM at this time. “UMTS900 handset penetration is forecast to reach 50% by 2014. Before this time it is will not be relevant for most operators to switch off legacy GSM networks,” says Mr Sampsa Laamanen, Principal Consultant at Omnitele.
In South Africa the three cellular networks Vodacom, MTN and Cell C share some infrastructure, but it is unlikely that they will join forces to build and operate a single mobile network. MTN, Vodacom and Neotel is however joining forces to build a national fibre network for their backhaul purposes.
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