Infrastructure sharing is understood as the use of the utility of a provider’s structure by another operator, aiming at avoiding its duplication and giving economic viability to the expansion of telecommunications services coverage. As demonstrated below, the market trend of separating the management of the infrastructure of investments from the provision of telecommunications services can be used as a lever, promoting free competition in Brazil from the entry of new players in the telecommunications market, provided that such structural separation is carried out efficiently.
According to article 73 of Law No. 9,472/1997 (General Telecommunications Law - “LGT”), telecommunications service providers of collective interest will have the right to use posts, ducts, conduits and easements owned or controlled by a provider of telecommunications services or other services of public interest, in a non-discriminatory manner and at fair and reasonable prices and conditions.
In addition, the sole paragraph of said provision determines that it will be up to the regulatory body of the assignee of the means to be used to define the conditions for adequate compliance with the legal provision in question. Thus, regarding the sharing of telecommunications infrastructure, the Brazilian National Telecommunications Agency (“ANATEL”) is the competent body for defining these conditions.
Law No. 13,116/2015 (“Law of Antennas”) establishes general rules for the implementation and sharing of telecommunications infrastructure, defining such sharing as the assignment, against payment, of surplus capacity - support infrastructure installed and not used, totally or partially, available for sharing - for the provision of telecommunications services by providers from other economic groups. The aforementioned Law of Antennas aims to promote and foster investments in infrastructure of telecommunications networks, aiming to encourage the sharing of these networks’ infrastructure.
Additionally, ANATEL’s Resolution No. 683/2017 approved the Regulation for Sharing Support Infrastructure to the Provision of Telecommunications Services, which aims to discipline the sharing of infrastructure to encourage the optimization of resources and the reduction of operating costs, rationalizing the use of facilities to avoid duplication of infrastructure, in order to benefit users of the services provided, in compliance with specific regulation of the telecommunications sector.
However, sharing of surplus capacity may be dispensed in some cases, for justified technical reasons, such as when it causes harmful interference between regularly installed telecommunications systems; when the human exposure limit to electric, magnetic and electromagnetic fields is exceeded, among other possibilities, according to the regulatory provision.
In addition, according to article 6 of the Resolution, the holder of the support infrastructure must make available, by means of the electronic systems indicated by ANATEL, within one hundred and eighty (180) days, the georeferenced technical information of infrastructures available for sharing, including all the criteria used to compose the price and the applicable deadlines, for the applicants to be aware of such documents.
Pursuant to article 7 of ANATEL’s Resolution 683/2017 and article 10 of Law No. 11,934/2009 (which provides for limits on human exposure to electric, magnetic and electromagnetic fields), the sharing of towers is mandatory by telecommunications service providers that use radio transmitting stations in situations where the distance between them is less than five hundred (500) meters, except when there is a justified technical reason or when using antennas fixed on building structures, harmonized with the landscape or installed until May 5, 2009.
It should also be noted that ANATEL produced an Operation Manual for Infrastructure Sharing, in accordance with the provisions of article 16 of Resolution No. 683/2017, to provide guidance on the operationalization of support infrastructure sharing to the Telecommunications Service Provision and indicate the recommended electronic systems for each type of infrastructure sharing.
The Manual points out the Wholesale Input Supply System (“SOIA”), operated by the Wholesale Supply Supervisor Entity (“ESOA”), as the electronic system for making available the information on infrastructure for sharing by the companies holding it. As to the provision of information about the sharing of towers by a telecommunications service provider, the Manual indicates the Integrated System of Spectrum Management and Control (“MOSAICO”), which carries out the licensing of stations.
In the factual plan, the RAN Sharing (Radio Access Network Sharing) on mobile networks can be mentioned as an example of infrastructure sharing, defined as a technical resource used by two or more telephony operators, in which certain resources are shared. Such architecture attracts the investment of many companies, due to its potential to reduce operating costs and increase profitability.
ANATELs approval for the mobile network sharing agreement (RAN Sharing) between Vivo and TIM, published in the Opinion 209 of May 2020, provides for a single 2G network, to be implemented in areas where both operators already operate, so that the remaining operator will provide services in technology to the base of the two companies. The proposal also provides for the 3G and 4G single grid contract in cities with less than 30 thousand inhabitants, in municipalities where one or both operators are present.
Another example is the exploitation of Personal Mobile Service (“PMS”) through Virtual Network, whose provision model is known as Mobile Virtual Network Operator (“MVNOs”), which involves PMS operators without their own license for the use of radio-frequency spectrum, needing, therefore, to use the spectrum of a traditional operator.
According to ANATEL’s Resolution No. 550/2010, which regulates the exploitation of PMS through the Virtual Network, the exploitation of the service through Authorized of the Virtual Network occurs when a legal entity, authorized by ANATEL for PMS provision, uses network sharing with the original Provider, through a network use sharing contract.
It should be stressed that infrastructure sharing has observed new formats, in addition to network sharing. In this regard, Vivo’s franchise model can be mentioned: as a franchiser, Vivo offers technical knowledge in the implementation of a fiber network, in addition to experience in the commercialization of its products and services; and the franchisee is responsible for the development of all necessary network infrastructure, in addition to managing the operation, including sales, service and installation.
It is also possible to mention the case of American Tower, which innovated by presenting a model of shared FTTH neutral network, intending to use the infrastructure of the former company Infovias, belonging to Cemig Telecom (which had assets acquired by American Tower at the end of 2018) to bring an “open” fiber network to around 300 thousand homes in Belo Horizonte.
In this regard, the same optical fiber installation can be used by several different telecommunications operators, offering different types of services, from different strategies, without exclusivity. Therefore, the company brings the network from the point of presence in the city to the box, providing fiber to the home (FTTH), with each operator simply making the connection and operation to the subscribers home in the last mile.
Along the same lines as the American Tower, other traditional Brazilian telecommunications operators have also sought the infrastructure sharing in the FTTH neutral network model, in view of the high market demand for optical fiber and the negative interest rates throughout the globe, that stimulate long-term investments, mainly by global funds of infrastructure investment.
It is interesting to note the recent case of the operator Oi, which presented an amendment proposal of its reorganization plan and opened the way for the companys sliced sale, in order to guarantee resources for the expansion of the fiber infrastructure and associated services, in five (5) isolated productive units (UPIs): mobile assets (telephony and data operation in the mobile market); towers (passive infrastructure); Pay TV (TVCo); data centers (passive infrastructure); and infrastructure (operation of telecommunications networks - InfraCo, composed in part by optical fiber assets transferred to UPI and also by rights of irrevocable use - IRUs - over the remaining fiber infrastructure at Oi).
While the first four UPIs will be sold in their entirety, UPI InfraCo will have a relevant interest of Oi in the total capital, through a structural separation model - that is, on the one hand, at Oi, there are customers, products, services and all associated interactions, while on the other hand, at InfraCo, there are long-term investments in physical infrastructure and technical management of the network and associated resources, with a focus on the implementation of optical fiber and data transport networks.
Such a model will allow the operator to transform its fiber network into an independent operation, with a neutral network, which will be the basis for the provision of all Oi services and will also meet the demands of other market operators, with different profiles of performance. The separation also allows attracting new capital contributions to the infrastructure unit (with great chances of coming from the company Highline), guaranteeing investments in the expansion of fiber throughout Brazil and accelerating the offer of FTTH services and the development of 5G .
It should be noted that, although the neutral network of fixed infrastructure tends to multiply investments and create more coverage of fixed broadband, by offering infrastructure to any actor who may need it, this novelty must require a series of technical, regulatory, commercial and cultural changes to ensure that the logic of structural separation between the services provider and the infrastructure operator is effective and competitive.
In this same regard, regulatory changes should also be driven by the implementation of 5G technology, which requires very high transmission capacity and optical fiber infrastructure, giving rise to a movement so that ANATEL creates a regulation for neutral networks.
The digital transformation of the economic sectors and the increasing demand for connectivity in different business models encourages investments in neutral networks and other types of infrastructure sharing, seeking savings and efficiency to address the Brazilian digital bottleneck. After all, “the future of telecommunications infrastructure is shared”.