October 1, 2012

O2 and Vodafone Aiming for Cost Efficient 4G Networks

O2 and Vodafone get approval from Ofcom to share their mobile networks.

O2 and Vodafone get approval from Ofcom to share their mobile networks.

O2 and Vodafone have had approval from Ofcom to work together in the creation of one joint 4G mobile network which will be used jointly by both O2 and Vodafone. The companies will combine their two existing national mobile networks into a jointly owned and shared mobile network. Costs will be reduced by up to 400 million pounds as a result of reducing network equipment etc. which otherwise would have been duplicated.

A 50/50 joint venture company will be formed to manage the shared network. The design and upkeep of the jointly shared network will be split equally between O2 and Vodafone.

The new agreement will increase the number of mobile masts to 18,500, bringing an increase of 40% in the number of extra masts for both 2G and 3G mobile services and ensuring coverage for 98% of the UK population by 2015.

This will also make way for a smoother and faster 4G launch schedule by both O2 and Vodafone who will use the same mobile network as above. Each will have its own competing 4G mobile network. Interestingly, the agreement means that both O2 and Vodafone aim to achieve 98% population coverage for their 4G networks by 2015 which is 24 months ahead of the official requirement from Ofcom.

Ronan Dunne, CEO Telefónica UK said: “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. One physical grid, running independent networks, will mean broader coverage and, crucially, investment in innovation and better competition for the customer. We look forward to Ofcom’s spectrum auction and the release of 800 4G spectrum.”