Analysis: How infrastructure sharing, RAN, and investments are reshaping Brazil’s MNO & Towerco Dynamics

The Brazilian telecommunications market, one of the largest and most dynamic in Latin America, continues to evolve as demand for mobile services and new technologies like 5G increases. However, this growth comes with significant infrastructure challenges, particularly in a country as geographically and economically diverse as Brazil. In this context, TIM has voiced strong support for infrastructure sharing, specifically focusing on tower infrastructure, RAN Sharing (Radio Access Network Sharing), and policies designed to foster investment. While this strategy presents both opportunities and challenges, it has wide-reaching implications for operators and tower companies alike.

Infrastructure sharing, particularly when it comes to towers and network equipment, is seen by many operators as a key solution to reducing the costs of network expansion. In Brazil, where deploying infrastructure across vast and often less profitable regions can be prohibitively expensive, sharing resources between companies can lower the barriers to entry and allow for broader coverage. This approach is particularly relevant with the ongoing rollout of 5G, which requires an extensive network of sites and antennas.

However, from a tower company's perspective, infrastructure sharing is a more nuanced issue. While shared infrastructure can lead to increased utilisation of existing tower sites and new leasing opportunities, it also has the potential to reduce overall demand for new tower builds. When operators share infrastructure, their need to independently deploy towers diminishes, potentially slowing the pace of new construction projects that many tower companies rely on for growth. This introduces a complex dynamic, where towercos must balance the benefits of higher site occupancy with the possibility of reduced long-term demand for standalone infrastructure.

For tower companies, the rise of infrastructure sharing presents both challenges and opportunities. On one hand, accommodating multiple operators on a single tower site can lead to higher revenue per site, as the utilisation of existing assets increases. This is especially important in a market like Brazil, where deploying towers in remote or economically marginalised areas can be less lucrative without shared occupancy. In these scenarios, infrastructure sharing can open new avenues for revenue while reducing risk for both tower companies and operators.

On the other hand, the widespread adoption of shared infrastructure could dampen the need for additional tower deployments. If multiple operators are able to achieve their coverage goals through co-location or network sharing agreements, the demand for new builds could slow. This is particularly relevant in the 5G era, where network densification is key, but the sharing of towers and radio access networks might limit the scope of new projects. For towercos, this requires a careful strategic approach, weighing the benefits of higher tenancy rates against the potential reduction in long-term demand for independent builds.

RAN Sharing, where operators share the same radio access network while maintaining separate core networks, has been a focal point of TIM’s strategy for expanding mobile services in Brazil. For operators, RAN Sharing is a highly efficient way to reduce the costs of deploying new networks, particularly in less densely populated or rural areas where the return on investment might be lower. By pooling resources, operators can expand their coverage more quickly and economically.

However, from the perspective of both operators and tower companies, RAN Sharing is not without its challenges. Some industry players, particularly smaller operators, have raised concerns that widespread RAN Sharing by larger players could distort competition, making it harder for smaller companies to compete on a level playing field. Meanwhile, for tower companies, the shared use of RAN infrastructure could mean fewer equipment installations on existing towers, potentially reducing revenue opportunities tied to leasing space for distinct network equipment.

In this context, tower companies may need to consider how the growing trend of RAN Sharing affects their business models. While the ability to host multiple operators on shared infrastructure can increase tenancy, the consolidation of network assets may reduce the diversity of equipment and services needed from towercos. This introduces a potential trade-off between short-term gains from shared infrastructure and the longer-term effects on new infrastructure demand.

As Brazil looks ahead to the continued rollout of 5G and other next-generation mobile services, the regulatory environment will play a key role in shaping the future of infrastructure sharing. TIM has advocated for pro-investment policies that encourage infrastructure development while also supporting healthy competition. Spectrum allocation, in particular, remains a critical issue, as the use of this public resource must be managed in a way that promotes both investment and equitable access.

For tower companies, the challenge will be navigating these regulatory changes while finding ways to capitalise on shared infrastructure models. In a highly competitive market like Brazil, the need to balance growth opportunities with the evolving demands of operators will require strategic planning and flexibility. Pro-investment policies could provide the regulatory support needed to encourage infrastructure expansion, but they must also take into account the diverse interests of operators and tower companies alike.

The Brazilian telecommunications market is at a crossroads, where infrastructure sharing is becoming a critical component of future growth. While this trend offers significant cost-saving opportunities for operators, it also introduces complex challenges for tower companies, which must adapt to a landscape where shared resources could slow the demand for new infrastructure.

For tower companies, the key will be finding ways to maximise the potential of shared infrastructure while continuing to drive new opportunities for growth. Whether through higher tenancy rates on existing towers or exploring new business models that cater to shared network needs, towercos will need to remain agile and responsive to the changing dynamics of the market. As Brazil and the rest of Latin America continue to embrace infrastructure sharing, the future will depend on striking a balance between collaboration and competition, ensuring that all players in the ecosystem can benefit from the ongoing evolution of the telecommunications industry.

Across Latin America, infrastructure sharing has been gaining momentum as a way to manage the high costs of network expansion in large and diverse markets. Countries like Mexico, Argentina, and Colombia have seen similar trends, where operators and tower companies are increasingly exploring shared infrastructure models to maximise efficiency and lower costs. In these markets, tower companies have also faced the challenge of balancing the benefits of higher site utilisation with the potential for reduced new builds.

For the region as a whole, infrastructure sharing presents a mixed bag of outcomes. While it can drive faster and more cost-effective deployment of networks, especially in rural areas, it also places pressure on traditional towerco business models. Tower companies that have traditionally relied on single-tenant sites may need to adapt to a landscape where co-location and shared infrastructure become the norm, potentially reducing the demand for new tower construction in key markets.