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Vodafone has started talks with Network Rail, the non-profit making UK Network rail provider, about extending its mobile phone coverage into railway tunnels, writes Bob McDowell, of Bloor Research. The objective is to improve the coverage and service to the lucrative, high spending business market.

Is this a good time to be doing this? Is this a steal on rival organisations? Many of the larger operators are capping or attempting to reduce their capital expenditure and holding back on more extensive network coverage. They are constrained by having a wider range of telecommunications services than Vodafone and need to generate cash flow in other areas, so their mobile services suffer.

Chris Gent, the Chief Executive of Vodafone, has stated, probably with tongue in cheek, that it "held back on its coverage on trains in the past because it had been less socially acceptable to be rabbiting on the phone with a train full of people". We are not sure that perception has changed or that the perceived intrusion of the mobile ever will change among some sections of the population.

Vodafone is at or very near the top of the mobile phone league on most qualitative criteria. It is taking the opportunity to advance its services at a time when the sector is at a near standstill in terms of service developments. At such times it can afford to take these steps at its own pace and with less competitive pressures. Making its services viable in tunnels is minor illustration of this.

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