A network with no towers

Joint ventures (such as MBNL or CTIL in the UK, TT Networks in Denmark or Net4Mobility, SUNAB and 3GIS in Sweden) are usually created to increase efficiency, reduce costs and, in some cases, create access to spectrum. The recently completed Finnish Shared Network was built to improve network capacity in rural areas, manage costs and create a better customer experience. Antti Jokinen, CEO of The Finnish Shared Network, talks us through how the idea was conceived and executed, and how they have managed to deliver a network with none of their own tower infrastructure.

TowerXchange: Can you introduce the Finnish Shared Network? What is your remit and footprint?

The idea behind the shared network was to share infrastructure, rollout faster and reduce costs by splitting them between our owners. We’ve been very successful since the network was completed at the end of last year. We don’t have any end user products, our owners are our customers so we have kept a fairly low profile since the completion of our network at the end of 2016.

If you look at the performance of the network, from public benchmark systems like Speedtest or Nettitutka, we can see that for sparsely populated areas in eastern and northern Finland the results are to my understanding, better than our competitors or even our owner networks themselves. 99.7% of the Finnish population is now covered and often with speeds better than in the more populated areas. I’m very proud of what we’ve done in covering a huge area and a million people with a limited amount of money.

TowerXchange: Why and how was the venture formed? 

The network was created by Telia and DNA, who wanted to create a JV company. I worked for DNA prior to this and there was a will to do this from both sides in order to save costs, and in that sense we have been very successful. We started the company from almost nothing and now have this fully operational network.

The other factor which drove the venture is that when you come to sparsely populated areas it’s not wise to divide the spectrum into too many pieces. In the US or other busy markets spectrum can be split in an inefficient way, but in this case we can use it to provide bandwidth to sparsely populated areas. If you compare our network to the joint ventures in Sweden it’s very different as the owner companies were forced into that situation as they didn’t win spectrum in the auction for 3G or 4G. We share spectrum across all technologies, we are not building borders between different spectrums and we can allocate it dynamically.

The Shared Network delivers fast rollout, lower costs and a better customer experience through better sharing of the spectrum. We also have access to the best towers and rooftops available; many more than one operator would have had in the past.

TowerXchange: How many towers do you operate? How many towers are there in Finland?

To be clear - we do not own or operate any towers. Our entire network is built through co-locations. Most network sharing companies have their own towers which they also rent out and a lot of their resources are invested in sales etcetera., we don’t have this kind of functionality; the fact that we don’t have to focus on this means we can focus on active network sharing. This model has enabled us to rent the best possible sites for each tower and to remain flexible.

We operate from around 1,700 towers and rent the space from Telia and DNA, our owner companies, as well as others. I would estimate that Telia has the biggest number of towers,  Elisa the second and DNA third, but all of the MNOs rent capacity from one another, it’s a very environmentally friendly and cost efficient system.

TowerXchange: JVs elsewhere (mainly in the UK and Scandinavia) all have very different models, from sharing passive infrastructure to RANsharing and deep integration, can you talk us through how the Finnish Shared Network operates and who is responsible for what? 

We manage the leasing of space from other players, building capacity, operating and maintaining the vast station network, KPIs, network performance and where we would like to create new sites. However the building of those sites is outsourced to partners, we look to other players to build and own towers for us. Telia and DNA own most of the towers that we use and our customer base is focused on those towers, but we also have access to several hundred towers from Elisa, Digita, Radioputki, Blue Lake Communications and Kaisanet.

TowerXchange: Do you think that the market is ready for a third party towerco? Why/why not?

Digita operates as a third party towerco but as a broadcast company we only rent a couple of towers from them. It doesn’t make any difference to us who owns the towers. The government does regulate how much can be charged for a space, and if someone builds a new tower I can be 100% certain that we can get capacity from it.

In terms of a third party towerco entering the market, in some senses it’s possible and in others not. The market is very open and one of the parties we rent from is Radioputki, who are a new totally independent player with about 40 towers. It’s pretty easy to get into this business and building towers is still very stable business as people rely on capacity from it. Operators have universal service obligations so they’re obliged to provide the service and need the coverage. Finland is the coldest country on earth but also the most stable country on earth, so it’s a good place to invest. In fact, until around five years ago Telia’s towers used to be spun out in separate company called Unibase but it’s now part of the main company itself, the towers changing ownership wouldn’t matter to us.

TowerXchange: What does the future hold for the Finnish Shared Network? 

Now that we have this 4G+ base capacity we’ll look at expanding capacity. We plan to look at the 5G universe, although as yet there is no completely clear picture on how 5G will look in very rural areas. At the moment, the idea of 5G is ready only for big cities like Singapore or Los Angeles, when it comes to high towers of 50m or over it’s not clear what will happen. We do have small cells and DAS in cities - we have some cities which are densely populated in the regions we cover, but those solutions won’t work in rural areas.

We have two key principles which we work from: 1) we only operate in sparsely populated areas to benefit those rural populations, and 2) we don’t own any towers at all. It’s good to know we’ve proven a joint venture can function this way.