T-Mobile UK and 3 UK Collaborate to Cut 3G Costs

British mobile phone operators T-Mobile UK and 3 UK have announced their plans to combine 3G networks in an effort to save GBP1 billion each, over the next decade. T-Mobile and 3 UK said that they would begin consolidating their networks early in 2008 and initially work on extending coverage to rural areas.

Steven Hartley, a senior analyst at Ovum, said “If they can make this work as fast as they say they will, you’ll see a flurry of these agreements in 2008 or the year after. What they are doing is trying to improve the bottom line by getting operating costs down while creating a situation where you can improve the top line by having better services.”

Faster speeds can be attained with high-speed downlink packet access (HSDPA), which is being billed as several times faster than the original 3G networks. T-Mobile UK and 3 UK are building HSDPA network in Europe.

Network sharing, however, existed since 2001. 3 Italia, owned by the Hong Kong conglomerate Hutchison Whampoa, shares its radio transmission towers with another Italian mobile phone company. Similarly in India, Vodafone Essar and two other operators are merging their towers into one independently managed company. In the US, some companies lease their radio towers, making network sharing less of a priority.

Further, Vodafone and Orange, two other British mobile operators, have been in talks since February 2007 to make a similar deal.

Japan’s NEC, Sweden’s Ericsson, Finland’s Nokia, British-based Vodafone group and French-owned Orange UK have also been in talks to share UK mobile phone networks.

Source: ComputerWire daily updates