Passive Telecom Infrastructure Sharing

What is Passive Telecom Infrastructure Sharing?
Passive telecom infrastructure mainly consists of sharing of towers and physical sites by various telecom companies. Infrastructure sharing helps in reducing the cost of providing service by reducing the capital and operational costs.
For a telecom company, infrastructure including the towers and backhaul connectivity account for about 60 percent of the cost of doing business. This indeed is a big investment to be made much before the services are rolled out. . Analysts predict tower sharing can reduce cost of ownership by 16-23%.
Infrastructure sharing may be new to India, but it’s a standard practice, globally. Though tower sharing has not been very successful in most European and Asian countries, it has been a success in USA which like India also has multiple operators.
While telecom companies are hiving off their tower infrastructure to cut capex and opex in the wake of declining average revenues per user, third-party companies like Quipo, are setting up independent tower companies to support the stupendous growth of telecom sector in the country.
What is its scope in the Indian scenario?
According to data released by TRAI the exponential growth in wireless telecom services calls for massive investment in infrastructure particularly passive, active and backhaul components. The country would require approximately 3,30,000 towers by 2010 against the present number of approximately 1,00,000 towers. Erecting each tower calls for an investment of approximately Rs. 20-30 crores. Apart from huge investments needed the time taken in roll out could be a major bottleneck in the achievement of 500 million subscribers by 2010. Even if the target is achieved it will only be about 50% of the tele-density with major gaps in the rural areas.
This clearly outlines the urgency and need for passive infrastructure sharing both in terms of investment and time.
Even the telecom companies are recognizing the importance and relevance of sharing the infrastructure. For large players who have a pan-India footprint, it means a new source of revenue, while for those expanding nationwide, it means lower capex and opex, as well as faster rollout of services.