Mobile operators Vodafone and Telefónica have announced plans to merge parts of their network infrastructure into one national grid, in an attempt to speed up the delivery of 4G services in the UK.
Under the terms of the partnership, both companies will continue to run competing mobile internet and voice networks, and will retain control of their wireless spectrum, core networks and customer data.
However, by sharing their existing basic network infrastructure, including towers and masts, both companies will have access to a single grid of 18,500 masts, representing an increase in sites of more than 40% for each operator. Duplicate sites will be decommissioned.
The companies claim that the deal will allow them not only to offer indoor 2G and 3G coverage to 98% of the UK population by 2015, but also deliver a nationwide 4G service faster than could be achieved independently.
“This partnership is about working smarter as an industry, so that we can focus on what really matters to our customers – delivering a superfast network up to two years faster than Ofcom envisages and to as many people as possible,” said Ronan Dunne, CEO Telefónica UK.
“One physical grid, running independent networks, will mean greater efficiency, fewer site builds, broader coverage and, crucially, investment in innovation and better competition for the customer.”
Eventually each operator will take the responsibility for design, management and maintenance of infrastructure in one half of the country. Telefónica UK will manage and maintain these elements in the East (including Northern Ireland and most of Scotland) and Vodafone UK in the West (including Wales).
The deal builds on an existing network partnership between the two companies, known as Cornerstone. All shared sites will continue to carry Telefónica UK’s traffic on Telefónica’s spectrum and Vodafone UK’s traffic on Vodafone’s spectrum.
“We have learned a lot from our existing network collaboration but now it is time for it to evolve,” said Guy Laurence, CEO of Vodafone UK. “This partnership will improve the service that customers receive today and give Britain the 4G networks that it will need tomorrow.”
The news comes as rival UK operator Everything Everywhere (the combined entity of Orange and T-Mobile) awaits approval from Ofcom to launch 4G services in the UK, using its existing spectrum at 1800MHz. Ofcom gave its provisional approval for the plan in March, but has been forced to extend its consultation period amid a storm of protest from rival networks.
In spite of today's news, Vodafone and Telefónica will have to wait until after Ofcom's auction of spectrum in the 800MHz and 2.6GHz bands before launching their own 4G network, as neither operator holds sufficient quantities of 1800MHz spectrum to launch 4G services in any compelling way. Both companies will act independently in the auction.
“This is an entirely sensible move by Vodafone and Telefónica in the UK. In fact, we did predict this as early as 2008, when we said that most countries would end up with only two physical LTE networks,” said Jeremy Green, principal analyst at Ovum.
“It follows on from the merger of T-Mobile and Orange in the UK into Everything Everywhere. If Vodafone and Telefónica had not also embraced sharing in this way they would have been at a competitive disadvantage. This sets them up well for the 4G rollout and will help them catch up on 2/3G rollout too,” he added.