Case study: Telecoms & ICT

Evaluation of the economic and operational benefits from network sharing of mobile infrastructure

The Problem: Competitive market with uneconomic coverage requirements

Compared to mobile industry norms, our client's home market was fragmented and highly competitive, resulting in low EBITDA margins across the industry.

The telecoms regulator had also mandated coverage requirements including sparse rural areas where population and ARPUs did not justify the capital expenditure necessary.

Our Approach: Bottom-up modeling of network sharing under different capacity scenarios

Our client was considering network sharing to improve profitability, but wanted to evaluate the financial potential before beginning discussions with MNO competitors.

Working with our client's main equipment vendor, we developed a bottom-up forecast of all RAN and backhaul costs for the next 10 years. We then applied different scenarios for voice and data growth. Under each scenario we calculated the potential capex and opex savings from sharing passive infrastructure, active infrastructure and backhaul.

The Result: Significant savings potential

The business case we developed implied potential cash savings of more than £1bn over a 10 year period.

The original plan was paused due to industry M&A activity, but our client has since signed a network sharing plan covering towers and network equipment for 4G services.

Contact

Stuart Keeping
Stuart leads Credo's Telecoms, Media and Technology (TMT) practice, based in London. He has over 25 years experience in both strategy consulting and general management, and has worked with many of the world's leading TMT companies - in areas such as commercial strategy, portfolio management, performance improvement, organisational development and transaction support.
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