Infrastructure Sharing for Cellular Networks in Tanzania: A Cost Reduction Analysis With Game Approach

Infrastructure Sharing for Cellular Networks in Tanzania: A Cost Reduction Analysis With Game Approach

Edvin Jonathan Kitindi, Catherine Francis Mangare, Asif Kabir
DOI: 10.4018/IJICTHD.2020010101
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Infrastructure sharing is a practical resource utilization strategy among mobile network operators (MNOs). The rapid growth of data flow and technology migration has increased the costs for both infrastructure deployment and management. Hence, to ensure effective resource utilization, researchers propose a joint venture towers construction for the mobile network in Tanzania. Cost reduction analysis for tower construction has been done through game theory. It has been observed that there is significant cost saving by the MNOs sharing the infrastructure. Based on game theory, it was found that 50% of the cost can be saved when the MNOs cooperate in tower construction, which in turn improves services to the users and increase the network rollout to the remote area. In general, network infrastructure sharing (NIS) benefits both operators and the public at large. The MNOs can have a significant financial saving by avoiding the costs of construction or upgrading the overlapping sites, consolidating the existing sites, and by reducing expenses related to rents, maintenance, and transmission.
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For the last decades, mobile communication has shown inspiring growth around the world. It has played a significant role in expanding mobile services such as voice and short messaging (SMS) to the unconnected population in developing countries. Internet development amplified the significance of the communication sector as an essential tool for global socio-economic growth. Hence, most states decided to make it a major public policy priority to ensure that the population has access to the network. The global penetration of internet services still lags behind, especially in rural areas whereby around 4 billion people in the world have no access to the internet (Jensen, Williams, & Strusani, 2015) (Philbeck, 2017). Most of these population groups are from developing countries found in Africa and Asia (Philbeck, 2017).

Traditionally, MNOs acquire and develop their infrastructures needed for their operations. They design the network architecture, topology, operate and maintain the entire network, and manage the customers’ relationship. These monopolized responsibilities face challenges due to the rapid technological changes, which involve migration from voice-based to data-based systems. The introduction of 4G technologies has led to an increase in the data flow within the networks. It has been forecasted that by 2025 the data flow will grow to reach 163 zettabytes (ZB) (Reinsel, Gantz, & Rydning, 2017). This demand requires MNOs to upgrade and extend its network infrastructure to increase the capacity and meet the traffic demands. Network extension became a significant challenge for both societies and operators. The former is due to high energy consumption, and the latter is the increase in cost (Antonopoulos, Kartsakli, Bousia, Alonso, & Verikoukis, 2015). Developing the mobile network infrastructures is costly and hard for MNOs to deploy in areas that are not attractive from a business perspective (Jensen, Williams, & Strusani, 2015); as a result, the remote area remains unconnected.

Network infrastructure sharing (NIS) is considered as a promising practical solution for MNOs to reduce both the capital expenses (CAPEX) and operational expenses (OPEX). Operators adopting NIS can substantially and sustainably minimize the costs. NIS is useful in startup stages for fast network rollout and cost-effective, especially in rural and less populated or marginalized areas. In developing countries like Tanzania, infrastructure sharing should be adopted in both urban and rural areas as sustainable telecommunication growth measures. The marginalized population can have access to the network for various developmental uses. It has been revealed that access to the internet has an impact on economic activities by accelerating communications, increasing access to the information, and improvement of productivity to the small and mid-entrepreneurs (World Bank, 2009). Evidence has shown that access to the right information such as weather conditions, market prices, livestock tracking, or disease control by the farmers can lead to an increase in production by 33%, which in turn reduces poverty in rural areas (Barakabitze, et al., 2015). 80% of the Tanzania population lives in rural areas and are engaged in agriculture (TanzaniaInvest, 2016) (World Bank, 2009), NIS can help to connect this population and improve their standard of living.

Furthermore, the mobile phone is not just a communication device to the Tanzanian population; it is their bank. All individual who doesn’t have access to the banking facilities, the use of mobile money serves the banking services to them at the cost of having a mobile connection. The individual can receive and pay cash easily for various purposes through mobile payment. These services are used by both illiterate and literate individuals in rural and urban as well.

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