• The agreement means less cost and faster deployment
• Autonomy in city centres means being able to respond to customer demand for new services

As expected, Vodafone and O2 in the UK have extended their network sharing  arrangements to ease the expensive roll-out of 5G. The initial calculation is pretty straight-forward.  If you can deploy more spectrum on fewer masts (or rather on masts that are cost-shared) then you can substantially improve the economics of the entire effort. And if you can arrange active sharing - not just the passive infrastructure (towers etc), but ‘active’ sharing of antennas and other infrastructure items, then the economics start to look even better. 

At the same time, though, 5G will introduce more spectrum in more bands than ever before, especially when you factor in the ‘refarming’ of spectrum used in 2, 3 and 4G and the eventual incorporation of mmWave spectrum as well. So operators’ requirements at any given mast are likely to diverge in future, making full-fat active sharing more problematic - for instance, one operator’s 5G applications strategy may involve a focus on IoT in a particular area. It may therefore want to deploy more low frequency spectrum. The mast partner may want a different spectrum mix to suit consumers.

Which is no doubt one of the reasons the sharing agreement is careful to specify greater 5G “autonomy” for  2,700 sites in larger cities. Vodafone says that at these sites, each party will install their own radio equipment, fibre ‘backhaul’ connection and power supply, whilst continuing to limit the environmental impact (and maximise the shared economics) by sharing just the physical elements such as the mast. 

According to Nick Jeffery, CEO of Vodafone UK, autonomous sites mean,  “we can boost capacity where our customers need it most so they can take full advantage of our new unlimited plans.”

The parties claim the autonomous sites will represent  just over 16% of combined mast sites. This is in addition to London - previously announced in 2018 - bringing the total number of autonomous sites to 25%.

The other good reason for this approach is that the operators are unsure just how quickly and to what extent the much-vaunted enhanced and assured services expected off the back of 5G are going to take off with their target markets. To enable the high speed, low-latency connectivity necessary to deliver those will require network slicing and full 5G core network support - hence the need for ‘autonomy’ and fibre connectivity to be deployed at the mast. 

It will be interesting to see if and how quickly the partners agree to peel more sites off for autonomous treatment as 5G rolls out and the shape of the 5G market becomes apparent.

According to the companies, though, the overriding motivation for the sharing is to get to reasonable non-standalone NR coverage faster and less expensively. “This means more people will get 5G sooner, helping to build a competitive digital economy and encouraging innovative new services that use 5G’s speed and greater reliability,” chimes Vodafone. 

Sharing the masts and extending the sharing agreements as much as possible also means having a good chance of avoiding the new mast problems which tend to bedevil new roll-outs. Nothing seems more likely to incite community action more effectively than a new mast going up - especially in semi-rural areas.

 The new agreement will see Cornerstone - the 50:50 joint venture company that owns and manages the parties’ passive tower infrastructure - take an additional role in the deployment of both networks and look to capture further operational efficiencies. In addition, Vodafone and O2 will now proceed to explore potential monetisation options for Cornerstone - in other words providing mast space for other network or specialist radio operators.