Celcom DiGi MoU – What does it mean to average joe like you

Very recently both DiGi and Celcom signed a Memorandum of Understanding (MoU) on infrastructure sharing.
This news generated a lot of attention from the industry and also the consumers. Within minutes, blog postings were up
trying to dissect the the move, and unfortunately due to lack of understanding had posed the negative connotation to the whole affair.

The MoU is to meet 2 aims
- For Celcom and DiGi to start infrastructure sharing at company level
- For Telenor and Axiata to start infrastructure sharing at group level

So here, you’d ask, what is infrastructure sharing?

Infrastructure sharing, in a simplistic view is sharing common delivery platforms. This means that a Celcom owned site can be used by DiGi and vice versa. Sharing of infrastructure can be deemed as such

- Sharing of sites – meaning that a physical site owned by the telco can be shared to host infrastructure such as BSC/MSC components in there
- RAN Sharing – RAN refers to Radio Access Network, providing access at the radio network layer for instant “lighting up” of the site. It requires all telcos to use same RAN vendors (i.e. Huawei, NSN, E//)
- Antennae sharing – Sharing the antennae of the tower to boost signal or to increase coverage.
- Backhaul sharing – Sharing of core transport such as site-to-site fiber/microwave infrastructure. This allows existing “dark-fibers” to be utilised to its full capacity.

Other ancilliary benefits would be that the individual telco now has a good rationale to “right-size” their field force operations since each site will be managed by the respective telcos.

How does this benefit Celcom? Celcom traditionally depends on existing TM infrastructure, which is now split between TM fixed line, TM FTTH, Streamyx and other wholesale and corporate usage. As such, the infrastructure would have been stretched thin and may not scale based on what Celcom wants. With the sharing in place, Celcom is able to expand their site and without having high CAPEX and leverage on DiGi’s network.

How does this benefit DiGi? DiGi would have access to Celcom’s well publisized whole malaysia coverage. However this would involve either buying backhaul bandwidth from Celcom/TM or building additional infrastructure.

How about the users? We’ve seen users complain that the sharing might bring down the quality of the network. That will not be the case. Each telco is allocated a spectrum band for both upstream and downstream (tx-transmitting/rx-receiving).This band separation allows the telco to transmit their RF signals without any interference to the other telcos. So, sharing sites will not impact performance of the network, it makes better utilization of the equipments/investments in place.

This makes perfect sense, as explained by Maxis CEO Sandip Das. Ability to increase coverage and capacity, at a fraction of a cost.

Rosy? Probably, but there are pitfalls. Sites being shared may be subject to fierce negotiations, as telcos may still see dominance in some coverage areas as strategic strength. In order for telcos to open up, the only differentiating factor for consumers to choose the service (all else being equal) would be the quality of the network, pricing, and multitude of services that fits the consumer’s apetite. But unfortunately, in Malaysia we are far from having the position of “all else being equal”.