Telefónica and Vodafone to slice UK 5G network bill

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Vodafone and Telefónica UK (O2) will extend their RAN network-sharing and explore possibilities of a joint fibre network to leverage scale and investment.

The UK operators’ existing network-sharing partnership will be expanded to include 5G joint radio-network sites. The aim is to allow them to deploy it faster, to offer 5G services to more customers over a wider geographic area, at a lower cost.

The companies will deploy their own radio equipment separately at around 2,500 sites in some larger cities outside London. This will give the operators greater flexibility to meet the needs of their customers.

Economies of scale

Vodafone and 02 also intend to upgrade their transmission networks with higher capacity optical fibre cables. They say this would enable customers to benefit from 5G’s features, such as low latency, as well as provide both companies with greater economies of scale and an improved choice of infrastructure partners.

Further, the partners are exploring options around sharing a fibre transmission network, to “drive synergies” in investment and the operation of their end-to-end networks.

Vodafone and O2 plan to devolve more activities to CTIL, the companies’ 50:50 joint venture they set up in 2012, which oversees their passive tower infrastructure.

This, they say, will allow CTIL to improve the efficiency of its operations and pursue opportunities to add further third party tenants to the towers. In future, they may explore a potential monetisation of CTIL after the new arrangements have been finalised.

Delivering value

Nick Jeffery, CEO, Vodafone UK, said, “We believe that these plans will generate significant benefits for our business and our customers as we move into the digital era of connected devices, appliances and systems on a mass scale. Customers will benefit from the best 5G experience available and we will deliver even faster speeds by using our spectrum holding more effectively.”

Mark Evans, CEO, Telefónica UK, added, “I’m excited by the potential of these plans to meet the future needs of our customers while delivering value for our business. In addition, these plans would allow us to utilise the spectrum we acquired in the last auction very effectively.”

The initiatives announced are non-binding and remain subject to the parties agreeing detailed terms, concluding legally binding agreements and receiving all necessary regulatory approvals

Vodafone and O2 aim to conclude these steps during 2019.