Neutral Host Networks - a win-win for MNOs and venue owners17-Mar-2016
The development of Neutral Host Networks in key venues, is one of the most important trends in the broadband wireless industry today. As mobile operators expand and densify their 4G LTE networks, the need to provide in-building networks to supplement the outdoor macro network becomes more critical. To provide improved coverage in key venues, and to meet the ever-increasing capacity needs, operators want to cover venues such as airports, shopping malls, enterprise buildings, college campuses, stadiums and arenas, convention centers, hotels, transit systems and other public venues that have dense user populations. But as individual MNOs look to deploy their own solutions in a venue, the cost for providing this additional coverage may not justify the benefit for the improved service. Yet, if a third party can provide one shared infrastructure, such as DAS, small cells or Cloud RAN that can support all operators in a venue, the economics suddenly turn in favor of both the Neutral Host provider and the MNOs.
Several key trends contribute to the needs for improved wireless networks in-building. Eighty percent of traffic is generated indoors for MNOs. The expansion of BYOD usage in enterprise environments means that excellent mobile service is now a mission-critical requirement. Quality wireless service has become an expected feature in dense user environments such as stadiums, shopping malls, and airports. Venue owners have become more focused on the need, and the value of providing excellent wireless service throughout their venues. In many cases, this could be the difference between a renter coming to a building, or a patron selecting whether to visit a venue.
Most mobile operator have plans to expand their coverage into individual venues. But prioritizing their economic and personnel resources to deploy in hundreds of separate venues can be challenging. And if one MNO deploys in a venue, this still leaves the majority of users from all of the other operators under supported in those venues. In many cases, it is either undesirable due to appearance, or impossible due to limitation of physical space for 3 to 4 MNOs to each deploy their own infrastructure in a building. These factors emphasize the desirability to have one shared infrastructure in a venue that can support all of the MNOs that want to be present in a location.
Having a single Neutral Host service provider that can deploy a shared infrastructure can be beneficial to the venue owner, the mobile operators, and the Neutral Host provider. For venue owners, they can have an excellent wireless infrastructure which can be used to their benefit. For example, an excellent in-building wireless service for all operators may be one of the key decision criteria for a company to locate to an enterprise building. In addition, the venue owner can generate a significant revenue source from the rental of space and utilities for the wireless service. In the case of the neutral host model, they can derive this revenue through only one agreement, and not have to deal with multiple operators. For some venue owners, they will not allow multiple infrastructures to be deployed, mandating that a neutral host deploy one multi-operator network in their building.
For the MNOs, the neutral host option enables them to expand their in-building coverage while saving money and accelerating the rate with which they can cover additional key locations. Most operators have a long list of buildings they would like to cover. A neutral host deployment allows them to save the upfront money they would invest in their own venue infrastructure, and save even more of the operating costs by sharing those costs with other operators. By working with neutral host operators on some venues, they can focus their own resources on other locations, and extend their coverage at a faster rate to more buildings. In cases where a single infrastructure is mandated, working with a neutral host operator maybe the only way for MNOs to gain access to these venues.
For the Neutral host operator, these technical and market trends create a new business opportunity. They can deploy an in-building infrastructure that allows them to sell service to all MNOs. If the Neutral Host operator can sell service to the MNOs at a price that enables them to, first, save the MNOs money over deploying and running the system themselves, and second, allows them to turn a profit based on the cost to deploy and operate the in-building system, then a win-win business model can be created. Wireless 20/20 has created a business case tool which has analyzed this model in detail.
The WiROI Neutral Host Venue Business Case tool enables a detailed analysis to understand whether a neutral host model can be successfully deployed for a certain venue. As an example, a 12-story enterprise building is evaluated below.
In this example, for one enterprise building, a Neutral Host Service Provider could deploy a multi-operator DAS network for around $200K CapEx, and turn a profit if all 4 MNOs join the network. Modeling analysis completed by Wireless 20/20 has shown that similar successful business models can be created for hotels, shopping centers, university campuses, airports, stadiums, and other venues. A detailed business case analysis is needed to understand the key success factors for each case. But the analysis often shows that multi-operator infrastructure can be profitably deployed in most situations.
As current mobile operator networks are expanding to meet the coverage and capacity demands, the enhancement of in-building coverage is one of the key areas for improving networks. As such, the trend toward Neutral Host deployment in desirable venues is one of the most important trends in the mobile industry. Venue owners, mobile operators, and Neutral Host Service Providers can all take advantage of the cost savings and efficiency of resources brought on by the sharing of infrastructure in venue environments. This creates a lasting win-win-win advantage for all industry players.
This blog was authored by Randall Schwartz, Senior Analyst and Principal Consultant of Wireless 20/20. Wireless 20/20 helps mobile operators and their vendors develop their 4G LTE launch strategies, service offerings, marketing plans, technology roadmaps and business cases. More information about the WiROI™ Neutral Host Network Venue Tool can be found at www.wireless2020.com