Research Notes

Brazilian telecom regulator Anatel estimates what mobile operators could earn by providing better coverage and quality of service in Brazil

Strand Consult agrees with some of the estimates, but finds the conclusions oversimplified.

Strand Consult’s analysis of many countries concludes that creating mobile coverage is a complex process involving many stakeholders and can’t be managed by regulators alone. Strand Consult has documented for years that it is difficult and expensive for mobile operators to build mobile networks in countries around the world. The exception is Denmark, where Strand Consult has worked with politicians, regulators, municipalities, and operators to reduce the barriers to build and run mobile infrastructure. As a result of Strand Consult’s work, Danish operators TDC, Telenor, Telia and 3 have saved millions of euros in lowered site rental costs and reduced the waiting time for mast approval from years to weeks. Operators recovered their investment in the program very quickly and now enjoy a stream of future savings in time and money. The report How mobile operators can reduce the cost of mobile masts and improve mast regulation describes the process in Denmark and what operators in other countries can do to improve their situation.

Anatel can be commended for recognizing the major barriers to mobile coverage in Brazil and their role to support solutions. Anatel’s report suggests that consumers are willing to pay more for an improved mobile service and that operators are missing out on up to US$17.13bn (R$40bn) per year. They note that more than 56% of Brazilian mobile users reported losing a mobile signal at least three times a month, and 40% of consumers said they would be willing to pay an additional US$2.15 (R$5 per month) for better coverage. Some are willing to pay even more: 10% of subscribers would pay US$4.30 (R$10) and a further 10% would pay US$6.46 (R$15) per month for better coverage. In fact 6.3% said they would be willing to pay as much as US$21.50 (R$50) per month for better coverage. Interestingly it was the 18-24 year old demographic that placed the greatest value on their mobile access with 56% claiming an unreliable signal as the main reason for looking to move to another operator.

To be sure, the standard of acceptable mobile coverage may vary from country to country, but the inputs to creating good mobile coverage are the same. To reduce the issue of mobile coverage as the sole responsibility of mobile operators is to overlook the complex and important interplay of all the actors which exert an influence on mobile coverage. In addition the quality of terminals and smartphones themselves can have a major impact a user’s experience of mobile coverage. Users also can improve their coverage by their selection and configuration of their smartphones. The role of smartphones in mobile coverage is another issue that Strand Consult addressed extensively in its report and in the process in Denmark.

Strand Consult knows the Brazilian mobile market well and its CEO John Strand has spoken on the topic of mobile coverage at Brazil’s leading telecommunications conference and in South American media. Brazil is not unique in having challenges with mobile coverage, but along with Switzerland and Chile, ranks among the countries with the most challenging barriers to building and running mobile infrastructure. Denmark too had major challenges, but Strand Consult’s process eliminated many barriers, and as a result there are many winners: consumers, operators, infrastructure providers, politicians, and regulators.

The 10 Steps to reduce cost for mobile masts and improve mast regulation

Strand Consult has developed three products for mobile operators.

Option A: How mobile operators can reduce the cost for mobile masts and improve mast regulation, a Report, Case Study, and 1 Day Workshop.

This solution delivers Strand Consult’s international experience in the form of a report How mobile operators can reduce the cost for mobile masts and improve mast regulation as well as a case study of the results Strand Consult has achieved. The report can be purchased separately or in combination with a customized one day workshop. In the workshop Strand Consult reviews the situation in the country, describes how to address the challenges, and makes an action plan with expected results. Many clients prefer this solution as a fast way to combine their knowledge with Strand Consult´s working experience. The report and case study are delivered immediately upon purchase, and workshop can be held within 1-2 weeks of request.

Option B: 10 steps to reduce cost for mobile masts and improve mast regulation, a 12-24 Month Training Program + Toolbox.

The option 10 Steps to reduce cost for mobile masts and improve mast regulation is for clients who desire to build an internal capacity required to overcome the challenges of building and running a mobile network. This option delivers a combination of reports, education, training, consulting, guidance, and support. It ensures that the process is learned internally, implemented externally with success, and that agreed results are achieved. It comes with guidance from Strand Consult’s experts and a toolbox of Strand Consult’s relevant reports, strategies and other materials. The option is delivered over 1-2 years to ensure that the knowledge is internalized and success achieved.

The goal is that over a set period of time, Strand Consult can contribute its international knowledge and experience to the operator. The clients that choose this option are those that operate in a market where coordinating with other operators in the market is difficult, and individual operators want to act on their own. This option lifts the level of sophistication of the operator to address the issue and improves the likelihood of success.

Option C: Strand Consult implements the solution to reduce cost for mobile masts and improve regulation

With this locally-based solution, Strand Consult assumes the role of the project leader and implements the process. With the challenges in the country and the need for local intervention, Strand Consult’s local representatives conduct the process with cooperation from the international team. The core team has many years of experience in telecommunications law, regulation, competition, engineering, and economics, as well as public relations and communications. With its combined knowledge and international experience, Strand Consult empowers its local representatives with professional support and expertise to deliver local results. The project is delivered in four phases.

This option puts the responsibility to achieve results on Strand Consult, and it requires the client to agree to a detailed plan with certain commitments in each phase of the project.

Do It Yourself vs. Expert Facilitation.

There are reasons why operators have not succeeded to date. They have tended to focus on the regulators and politicians. These actors have authority but their abilities are limited to making laws and proclamations They are not involved are the local level where decisions and implementation takes place Operators have not understood how they have to build relationships at levels. Second, operators tend to work independently of other operators in the marketplace, but improving mobile coverage often demands that competing operators work together.

Having an external facilitator such as Strand Consult solves these problems. Strand Consult is expert at liaising with stakeholders at levels and can facilitate cooperation between operators. Strand Consult also provides credible, independent evidence about the barriers to mobile coverage. This information is important for educating the media. When these reports are provided directly from industry, however sound and scientific, they often are considered biased.

While Strand Consult has documented that operators face similar challenges around the world, it recognizes that each country has a unique language, culture, and history that creates a special context. Stakeholders want to engage with parties with whom they feel trust, shared understanding, and common language. Furthermore operators want a sense that they can solve their own problems. Leaders want to believe that they are capable and desire to demonstrate to shareholders that they add value. Like a discouraged athlete who seeks the guidance of an expert coach, operators just need help behind the scenes so they can win the big competition.

Strand Consult succeeded in Denmark because it created the process, assembled the team, and engaged all the stakeholders to resolve the challenges. Managing the engagement process requires finesse, creativity, and endurance. It was Strand Consult’s persistence on every level which brought the process to a successful conclusion in Denmark.

In practical terms it can be difficult to for an operator to do this on its own. There are a set of competencies and practices which may not necessarily be a part of the day to day activities of operators and infrastructure providers. This is not to say that operators and infrastructure can’t assemble a team or analyze a situation, but the fact is that it will take time to overcome the learning curve, whereas working with Strand Consult allows operators to hit the ground running.

Strand Consult is committed to empowering operators with the knowledge to address the challenge of mobile coverage. It has created three packages to allow operators to take advantage of engaging with an external partner with proven expertise and a track record, and to choose for themselves the degree to which they run process.

For more information about 10 Steps to reduce cost for mobile masts and improve mast regulation, contact Strand Consult.

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