Orange Spain CTO makes plea for network sharing

In a frank assessment of the challenges faced by European operators deploying LTE, Eduardo Duato, CTO at Orange Spain, told delegates at this year’s LTE World Summit that operators “can’t make a success of LTE unless we change the way we roll out networks.” Despite the improvements that LTE offers over previous generations of network technology in terms of cost and spectral efficiency, Duato said that operators “have to make a massive investment to make money from LTE.”

Network sharing is the only way forward for European operators, he said, comparing Europe – with more than 100 operators – to the US, which is a comparable size and has only a handful of carriers with nationwide network deployments. “It doesn’t make sense to have this many networks [in Europe]” he said “we have to move to LTE network sharing.”

Duato called on national and European regulators to do everything possible to support operators intent on building pan-regional shared networks, as well as the vendor community. When asked how he thought vendors would react to the drop in network sales that such widespread sharing would inevitably bring about, Duato suggested they could make up the shortfall through larger managed services deals.

He also intimated that Orange might be prepared to give up spectrum to enable this strategy, given the right circumstances. While the operator has little to spare in urban areas, he said “we don’t need all the spectrum we have in rural areas.” He added that if operators were allowed to pool frequencies, then negotiations would be made easier.

Adressing the issue of operators’ relationships with OTT players, Duato said: “It is extremely difficult, almost impossible, for operators to profit from OTT services.”

This view runs somewhat in contrast to another speaker at the Summit, John Blakemore, director of European regulatory affairs, Hutchison, who said: “We don’t have a problem with innovation coming from the OTTs. A few years ago, we had a service called ‘X-Series’, where we worked with Microsoft and Yahoo, and Skype to put their services on mobile devices. We did that when it was still early days and the services weren’t out there in the market. If you look at the industry as a whole, our record of developing services is not that strong. As operators, what we’ve been really good at is deploying efficient networks and making sure our networks support services – and that’s fine. We’re a little bit more relaxed about the content and applications not coming from within the industry.”