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The evolving mobile wireless industry is confronted with volatile market conditions, as illustrated by wireless carriers’ returning licenses, operator’s delaying Third Generation1 (3G) network rollouts, and service providers deferring next-generation services’ offering (Maitland, Bauer, & Westerveld, 2002; Sabat, 2003a). To navigate the tide, the industry’s players are restructuring (Sabat, 2003b; Ure, 2003). Restructuring strategies include adopting stringent performance targets, reducing stakes in non-strategic ventures, spinning off their ventures, liquidating their positions in forward-looking ventures, forming joint venture with an established company in the field, abandoning ventures, exiting the industry, focusing on core competencies, significantly delaying network roll-outs, and launching 3G applications with moderated functionalities (Sabat, 2007). In doing so, companies are primarily guided by the industry’s cost drivers, as the industry is capital-intensive.2 The impact of capital investments (or capital expenditure or capex) on a company’s business viability is described in earlier papers (Sabat, 2002c). The notable cost drivers include network operators’ capital investments, which is the most influential cost driver (Sabat, 2005a). Consequently, operators are vigorously seeking means to reduce their capital expenditure and return to profitability.
Sharing the costs of building networks and the expenses in provisioning wireless services (hereafter referred to as ‘network sharing’) is one such strategy that is increasingly being favored by wireless operators. In a network sharing arrangement, an operator essentially joins another operator to build and operate the network, and to provision wireless services. The European Union and several national governments have endorsed the concept of network sharing (European Commission, 2001; RegTP, 2001). Whalley (2004) identified competitive enhancing co-ordination strategies in six different areas that include wireless network sharing. Table 1 presents major network sharing agreements that were reported in earlier papers (Olla & Patel, 2002; Sabat, 2008a; Whalley, 2004).