Vodafone and O2 Given Green Light to Merge UK 3G and 4G Mobile Networks

Mobile operators O2 (Telefonica) and Vodafone have been given the green light to merge their UK based 2G, 3G and future 4G (LTE) platforms through a new network sharing agreement that will also lay the foundations for 98% population coverage by the end of 2015 (two years ahead of Ofcom’s 2017 deadline).

The agreement is similar to the existing network sharing deal between T-Mobile, Orange UK, EE (Everything Everywhere) and Three UK that resulted in the creation of a separate group called the Mobile-Broadband Network Limited (MBNL).

O2 and Vodafone’s plan also involves the creation of a new 50/50 joint venture company (CTI Ltd) that will manage their single “national grid” network of 18,500 sites across the UK. Both operators will continue to run independent spectrum and competing services.

Ronan Dunne, CEO of Telefónica / O2 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 spectrum.”

Guy Laurence, CEO of Vodafone UK, said:

“This is excellent news for British consumers, businesses and the wider economy: we are promising indoor coverage for 98% of the UK population across all technologies within three years. We will bring the best mobile coverage that this country has ever enjoyed to more people than ever before. Our existing customers will benefit on the devices that they have today and we will lay the foundations for the real 4G network they will want tomorrow.”

Each operator will also have to take responsibility for the design, management and maintenance of the radio equipment and local transmission on one half of the country. For example, O2 will manage the network in the East of England, Scotland and Northern Ireland, while Vodafone will do the same in the West of England and Wales.

The scheme itself was officially cleared by the UK regulatory authorities (Ofcom and the Office of Fair Trading) at the end of last week (sorry we’re a few days late in covering this news), although its plans to offer a 4G based Mobile Broadband service will depend upon the outcome of Ofcom’s related auction of the require wireless spectrum bands (800MHz and 2.6GHz). The timing for this will in-turn also depend upon the outcome of today’s crunch talks between the industry’s largest mobile operators, the government’s culture secretary and Ofcom (details).