Quantifying the Benefits of Infrastructure Sharing
For telecom operators and regulators, it provides theoretical justification for infrastructure sharing to accelerate 5G deployment, though the analysis is limited to two-player scenarios.
The paper analyzes network sharing between two telecom operators, showing that sharing can be beneficial even when one operator could drive the other out of the market, due to non-convex cost functions.
We analyze the benefits of network sharing between telecommunications operators. Sharing is seen as one way to speed the roll out of expensive technologies such as 5G since it allows the service providers to divide the cost of providing ubiquitous coverage. Our theoretical analysis focuses on scenarios with two service providers and compares the system dynamics when they are competing with the dynamics when they are cooperating. We show that sharing can be beneficial to a service provider even when it has the power to drive the other service provider out of the market, a byproduct of a non-convex cost function. A key element of this study is an analysis of the competitive equilibria for both cooperative and non-cooperative 2-person games in the presence of (non-convex) cost functions that involve a fixed cost component.