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British mobile giant Vodafone and Spanish Telefónica have teamed up to strengthen their UK subsidiaries, O2 UK and Vodafone UK. Under the new collaboration, the companies will pool the basic parts of their network infrastructure to create one national grid running each operator’s independent spectrum.


The move will create two competing networks that will be able to offer indoor 2G and 3G coverage targeting 98% of the UK population by 2015, delivering mobile coverage and mobile Internet services to the vast majority of UK households. It will also ensure the capability for the next generation of 4G mobile services is rolled out as widely and rapidly as possible.


The partnership will lay the foundations for two competing 4G networks to deliver a nationwide 4G service faster than could be achieved independently, and up to two years before the anticipated regulatory requirement of 98% population coverage by 2017. “Demand for the mobile Internet has challenged the industry to consider innovative solutions to building a nationwide network.


This partnership is about working smarter as an industry. One physical grid, running independent networks, will mean greater efficiency, fewer site builds, broader coverage and better competition for the customer,” says Ronan Dunne, CEO of  Telefónica UK. The partnership will close the digital divide for millions of people across the country and power the next phase of the smart phone revolution, says Guy Laurence, CEO Vodafone UK.“We have learned a lot from our existing network collaboration but now it is time for it to evolve,” he adds.


One Grid, Two Networks

Telefónica UK and Vodafone UK propose jointly to operate and manage a single network grid in the UK that will run two competing nationwide mobile Internet and voice networks. Both companies will retain complete control over their wireless spectrum, intelligent core networks and customer data. They will continue to compete with each other in all products and services, enabled through the ‘intelligent’ parts of their networks.


A new 50/50 joint venture company will be created through the consolidation of both Telefónica UK and Vodafone UK’s existing basic network infrastructure, including towers and masts, which will be transferred to the joint venture over time. Under the proposals, 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.


The joint venture will also be responsible for the building of new sites needed to extend coverage into rural and remote areas. There will be opportunities for the decommissioning of duplicate sites and, as a result, the two companies expect there will be a more than 10% overall reduction in the total number of sites, in the UK, used by the two operators. 


Each operator will over time take the responsibility for design, management and maintenance of the radio equipment as well as local transmission (that connects to each operator’s intelligent backbone network) 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).


Just as under Cornerstone, the two companies’ existing network partnership, all shared sites will continue to carry Telefónica UK’s traffic on Telefónica’s spectrum and Vodafone UK’s traffic on Vodafone’s spectrum. Both operators will continue to remain responsible for their own existing spectrum holdings and for fulfilling their own spectrum needs in the future. The launch of 4G services is subject to the outcome of the forthcoming Ofcom auction of new spectrum and both companies will act wholly independently in that auction.


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