Does 5G Require Infrastructure Sharing?

Some observers and analysts believe 5G requires infrastructure sharing. Others might strongly disagree. “Korea Telecom estimated that on average 5G networks would need four times the amount of transmitters per given area compared to 4G networks,” the World Economic Forum has said.

That might seem like a lot of new cell sites. But what it generally means is that existing 4G sites will need to shrink their radius 50 percent. That means four times as many new sites to cover the surface area formerly covered by one macrocell.

If that “four times more sites” prediction proves generally correct in South Korea, it will mean that 4G cell site radii are reduced about 50 percent when 5G is launched. Korean mobile operators have agreed to share the cost of 5G radio sites, so we can assume they see both cost savings from sharing and little strategic advantage to be gained by fully-owned facilities.

That might not be the case in all other markets. In the U.S. market, though cell sites often are shared, radio infrastructure tends to be fully-owned. That noted, AT&T, Verizon and Tillman Infrastructure have partnered to build hundreds of cell towers, with the potential for significantly more new site locations in the future.

Tillman, owner and operator of towers, small cells and smart cities infrastructure, has agreed to construct these towers to-suit with AT&T and Verizon, which have committed to leasing and co-anchoring the co-located towers.

At least in part, that decision by AT&T and Verizon might have more to do with gaining bargaining leverage over the firms from which they both lease most of their radio sites, than any particular cost-savings on the actual towers built with Tillman Infrastructure.

“We need more alternatives to the traditional tower leasing model with the large incumbents,” said Susan Johnson, SVP of Global Supply Chain, AT&T. “It’s not cost-effective or sustainable.”

AT&T and Verizon clearly want to reduce tower site costs. “It is imperative to reduce operating costs,” said Nicola Palmer, chief network officer of Verizon Wireless.