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Investing in a new Radio Access Network (RAN) infrastructure is a multi-billion dollar undertaking. When Telia lost the beauty competition for the 3G licences in Sweden for the period of 2001-2015, they decided to cooperate with Tele2 and formed a joint venture, Svenska UMTS-nät, for the 3G RAN network. The model has been copied in a few markets, like Norway, Austria and Australia. For the next generation 4G/LTE network, Tele2 is now cooperating with Telenor in a similar way to the joint venture Net4Mobility.

While there are technical constraints associated with not having full control of network resources, there is an obvious gain in cutting the investment costs in half. Most of the technical limitations are addressed as the technology matures. But the commercial aspect is harder to tackle. Sharing the complete radio network makes differentiation very hard.

This is a multi-billion dollar question, and the jury doesn’t seem to have reached their verdict. Yet.JV