[3GScottishUser]

3 and T-Mobile expect to slice £2bn off their combined costs over the next ten years after agreeing to share the cost of building 3g and HSDPA networks.

The two companies expect to have 98% of the whole population of the UK on HSDPA networks by 2009 in what will be the most extensive HSDPA network in Europe.

It puts both companies in pole position to usher in an era of cheap mobile broadband, with both companies expecting to pass on their savings to consumers.

A spokesman for T-Mobile said: ‘The likelihood is that, yes, it will result in even better value for consumers. We will be able to bring out more and better services faster and cheaper.’

The two companies expect to do away with 5,000 masts as part of the deal.

It follows a similar network share agreement between Vodafone and Orange which was signed earlier in the year but has failed to pick up momentum as both sides have negotiated over the value of their relative assets.

In contrast, T-Mobile and 3 have agreed on all aspects of the deal after a memorandum of understanding was made in the summer. The network share plan will start from 1 January when the two networks will start being stitched together. 3 has the broadest 3G coverage in the UK, followed by T-Mobile.

It has also put O2 as the odd-man out in network share alliances, and the operator with the weakest 3G network as the hype around mobile broadband looks to be becoming a reality.

T-Mobile and 3’s partnership has apparently been cleared by regulator Ofcom, as it is believed to be satisfied the two companies will simply share infrastructure but bring mobile broadband to the market much quicker and more efficiently.

Both parties have been competing toe-to-toe in the mobile broadband market with 3 undercutting T-Mobile on when it launched its USB modems for laptops, and T-Mobile following up with a hefty price cut.

Both companies appear keen to rubbish speculation that the network share arrangement is a prelude to a potential acquisition of 3 by T-Mobile. One source said: ‘All this does is increase the value of 3, so it’s nonsensical if an acquisition was being planned.’


From Mobile Today: http://www.mobiletoday.co.uk/tmobile_3_network_share.html

[3GScottishUser]

Some further details:

T-Mobile's UK ceo Jim Hyde has told Mobile Europe that he thinks there could be "lots of things" his company and 3 U K could collaborate on in the future.

Following the news that the two operators will form a 50/50 joint venture to manage and operate a combined 3G network, both operators insisted their are no meger plans, but Hyde said, "There's lots of things that could present the opportunity for further partnerships. One would be the further development of services, to collaborate on the development of next generation services."

As for the deal itself, 3 Uk's ceo Kevin Russell, said, "T-Mobile's population coverage for 3G is currently at 85% coverage and 3 at 90% . This takes that up to over 98%, but the real difference is in the depth of the coverage. 3 currently has 7,500 base stations and this will give us up to 13,000 base stations."


The partnership deal does not cover the backhaul network - a key cost factor for mobile operators. And there is a mechanism in place to allocate costs on a use case basis. In other words, if one operator's users are hammering a cell with a bandwidth heavy service, then costs of operation will be allocated on a cost basis to that operator. There will be no degredation to customer experience caused by either of the other operators' customers, Mobile Europe was told.

Naturally such an operation takes software and processes to manage and control the networks. As we and others been saying for some time, the business of network sharing requires policies, technology and processes to ensure parties are happy, and increases the dependance on service innovation and marketing. Orange and Vodafone announced in February 2007 that they plan to share networks, but T-Mobile and 3 UK seem to have stolen a march operationally.

Hyde sad that cost savings from the T-Mobile 3 UK sharing deal will be split 50/50 betweeen opex and capex - which means between them the operators are saving a billion on network operations over the next ten years. Suppliers are aware of the process of selection now - with some likely to miss out as purchasing is consolidated between the two operators.

10:08 am
T-Mobile and 3 UK will save £2 billion between them over the next 10 years by sharing a national, HSPA-enabled 3G network in the UK. T The two operators have signed an agreement to combine their 3G radio access networks, although they will continue to operate their own core networks, and T-Mobile's 2G network will stay T-Mobile's.

The shared network is scheduled to be completed in just over two years and the operators say it will provide "blanket" UK population coverage - taking both operators beyond the 3G licence obligation of 80% population coverage that both T-Mobile and 3 UK already comfortably exceed. The combined 3G access network will share physical assets and offer greater capacity than the two operators’ existing independent 3G networks, the operators said.

A 50:50 joint venture company called Mobile Broadband Network Limited has been set up and will supervise the creation and operation of the joint network on behalf of both companies. The operators plan to decommission over 5,000 duplicate sites from both parties’ combined existing cell site portfolio. Together with the lower future capital expenditure requirement, the combined savings are estimated at £2 billion over 10 years.

Under the joint venture contract, which runs to the end of 2031, both operators will work as equal partners in planning the development and operation of the integrated access network while remaining competitors in the UK mobile wholesale and retail markets.

Jim Hyde, Chief Executive of T-Mobile UK, said: “3G is a transforming technology, but this will be the first time that a 3G access network in this country is able to achieve both the reach and the capacity to meet the needs of the future. Our aim, quite simply, is to ensure the customer is always best connected. From 2008, customers can expect to have access to high-speed 3G services in a greater number of locations than we can currently serve over our existing infrastructure. By collaborating with 3 UK, we can achieve this quicker and with greater economy - that’s a win-win in anyone’s language.”

Network sharing is clearly a boon for operators in helping them meet regulatory requirements, and cutting costs, it also enables them to claim environmental benefits. The challenge, however, will be to differentiate on service innovation and delivery, as there will be little point claiming a benefit on quality of service, or coverage or capacity differences.

The operators will not be sharing transmission capacity on the backhaul to the core network. That is clearly of interest as to how and where they will apply any plans for routing, traffic shaping and prioritisation, and service awareness to data traffic. Nokia, one of 3's key suppliers, has spoken recently on the benefits of increasing service awareness at the GGSN.

http://www.mobileeurope.co.uk/news_analysis/113467/3_UK_and_T-Mobile_to_share_3G_network_-_and_more%3F.html

[Ben]

Great news, I think. If we can achieve 98% HSDPA coverage in the UK relatively quickly then Mobile Broadband will be a success. That the deal has been being worked on for some time now probably explains why T-Mobile and Three have already priced their offerings so aggressively.

It's a little bit sad that the networks wont be solely responsible for their own networks any more... I'm still not sure what the outcome of these agreements will really be for us customers. Hopefully very positive... but who knows.

One thing I'm really unsure of is where all this leaves O2?

[3g-g]

One thing I'm really unsure of is where all this leaves O2?

It's OK, they've got the iPhone don't cha know! ;)

[Hands0n]

Mobile Broadband Network Limited
The latter day Railtrack of the airwaves? Inevitable I think. We are seeing parallels in the wires environment with BT Openreach - the only way to effectively generate the UK's unbundled Broadband market which BT (now BT Wholesale) persistently stifled until it had the "wires" taken away from it.

And so we may yet see an unbundling in this mature Mobile Networks arena. It makes complete sense to me. Let the next-generation MNOs sell services and let the network become entirely transparent and invisible.

What this does for the UK is probably make us the global capital for 3G/HSDPA networking. A model for other nations to follow, yet again (well, except for the old and outdated USA).

I cannot but help think that O2 will come to the T-Mobile/3 joint venture's party. It would make complete sense to. O2 would be able to sell its network assets to Mobile Broadband Network Limited and get on with what it does so very well, marketing. I think that this will appeal to O2 greatly. For sure, they no longer can compete in 3G - and with the expense of rolling out EDGE for the iPhone (stop laughing at the back) they can hardly afford to do much more with their 3G network and please the shareholder. No, expect to see an announcement within six months that O2 are joining the alliance.

That leaves the warring Vodafone and Orange - these two old giants had better get their act together or they'll be completely left behind. Will they join the club? Maybe not in five years - but the financial arguments to do so will put great pressure to bear. No shareholder is going to stand by and watch a saving of £1Bn+ not be exploited. The way I see this particular thread playing out is that Vodafone and Orange will do their stuff and later on merge into Mobile Broadband Network Limited - the mobile equivalent of BT Openreach will have been born.

Remember, you read it here :D

[3GScottishUser]

I am not sure 02 will follow the herd. They have ignored the trends time and again and every time to date they have won market share. Just one look at the avitars here tells you all you need to know about how 3G can be sidelined and EDGE employed with a killer brand at premium prices.

If you have mega cash flowing in you can stand alone whilst the others scurry around cost cutting and fighting head on with similar offerings.

02 I would not loose any sleep over and nor will Telefonica me thinks!!

[Ben]

I quite like Hands0n's theory of the Railtrack of the Airwaves.

I'd personally prefer it if at least two transmission networks were maintained, so there's at least some wholesale competition, but it's quite possibly the right way forward... there's so much duplication at the moment - I drove past a mast the other day with 5 sets of panels on it, now where's the point in that?

[3g-g]

I cannot but help think that O2 will come to the T-Mobile/3 joint venture's party. It would make complete sense to. O2 would be able to sell its network assets to Mobile Broadband Network Limited and get on with what it does so very well, marketing. I think that this will appeal to O2 greatly. For sure, they no longer can compete in 3G - and with the expense of rolling out EDGE for the iPhone (stop laughing at the back) they can hardly afford to do much more with their 3G network and please the shareholder. No, expect to see an announcement within six months that O2 are joining the alliance.

That leaves the warring Vodafone and Orange - these two old giants had better get their act together or they'll be completely left behind. Will they join the club? Maybe not in five years - but the financial arguments to do so will put great pressure to bear. No shareholder is going to stand by and watch a saving of £1Bn+ not be exploited. The way I see this particular thread playing out is that Vodafone and Orange will do their stuff and later on merge into Mobile Broadband Network Limited - the mobile equivalent of BT Openreach will have been born.

Orange & Vodafone are already in the midst of agreeing terms for their own network share, which seems to be taking ages! It's now approaching a year since they made that announcement! If T-Mobile and Three are planning on having this running by the end of 08 they must of been planning it for ages as it requires regulatory approval, and I know that in itself takes a while.

As far as O2 are concerned they'll need to go to one of the companies that are set up, whether that's T&3 or O&V... they'll never last competing against the pooled resources of the 4 companies working as 2, the sheer cost savings made by the 4 together will allow them to storm ahead. Telefonica is a big player, and for the big old boys it's all about cost savings in mature markets, that's the UK, Spain, France & Germany. Vodafone are doing it, France Telecom are doing it and Deutsche Telecom are too, as sure as eggs is eggs Telefonica will be wanting to save the cash.

O2 may have the customer numbers just now, but they'll soon dwindle as the consumer notices that the other 4 networks offer high speed services in a greater number of places, I think O2 clinging onto GSM for all it's worth is a poorly informed decision, they should be concentrating on making their absolutely massive 2G network an absolutely massive 3G one or within 5 years there'll only be the 4 main "network" operators.

[Hands0n]

It is a fact that O2's 3G network is [lets be kind] not quite up to competing with the other players. It is a fact that O2 have made a significant spend implementing EDGE, an obsolete technology in this market. They have underpinned their high-speed data tactic (I refuse to believe it is a strategy) on The Cloud. O2 3G users have a disappointing experience making the likes of the Nokia N95/8GB entirely moot in technological terms.

Moving on O2 are unable to compete toe-to-toe with the other networks in terms of Content. The enlightening experience of 3GSU with 3's 3Skypephone has been sufficient to draw him back into a contractual arrangement with 3. There is nothing, absolutely nothing that O2 can do to even compete with that at this time. Even against the £49.99 Chinese built Amoi.

O2, it is my contention, are therefore reliant upon (a) their legacy Customer base and (b) the Apple iPhone. All that the latter will do is increase the hunger of the buyer to do data on the move. That the iPhone's Safari browser is a powerful and enlightening experience will, against an N95 on 3G, start to pale when page-display speed is seen. Playing these two side-by side on mobile networks is quite telling. But then when looking at other content - i.e. video and streams - and O2 are left in the dust.

No, O2 need a strategy for 3G and they don't appear to have one just yet. Will Telefonica bail them out and spend to increase their 3G spend in the light of consolidations such as T-3 and V-O? I remain completely bearish about this - O2 are in a weak position despite their Customer numbers. The others will, inevitably, make gains at O2's expense. O2? Sell, sell sell.

[gorilla]

T-mobile and three issued strong denials about this partnership being anything more than a network sharing deal. However, I for one would welcome their partnership to grow into a merger or acquisition (which would be the more likely). As a UK wide operator T-mobile has never fully established it's 3g network, and while three has been slowly building it's own 3g network, it's coverage is not what it might be. The result, three rely on other networks when their customers are outside 3g coverage and T-mobile not being able to meet (my) demand! They have long been touted as being the perfect marriage and their potential partnership growing should be the catalyst this mobile market needs to drive mobile data forward.

O2 and cloud could skip 3g altogether and roll out wi-max. Therefore, the iphone would be viable and cloud and O2 could be pioneers!

Anyone have any idea when GSM is going to be switched off?

[miffed]

Interestingly , I have just received a text from o2 with a link to their HSDPA coverage map - with "great news" that they have improved coverage in my area

http://www.webmap.o2.co.uk/map.asp


Looks like it is mainly south london - but they appear to have HSDPA around your way Ben !

[Ben]

News to me! ;) Certainly looks like I should be in the thick of it, though... I'll have to find out somehow.

[miffed]

Unbelievable !

If you look at the map (using the postcode of my workplace CT5 2AJ)
- You'll see that along the left hand side , there is a "void" inside the coverage radius that runs along the yellow road ....
... My workplace is right at the end of that Void ! Bloody typical "miffed" luck that is :(

[Hands0n]

I tell ya geezer, you is definitely cursed. On the other hand, I are well blessed :D