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Vodafone and O2 muddy the radio network waters

Promising to share networks, like they already do

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Comment O2 and Vodafone are in talks about sharing network sites and infrastructure in the UK, the Financial Times reports. This would be interesting if the companies hadn't already done this for decades.

According to the FT a deal between the two companies would save costs and, if spectrum sharing is included, could solve the 900MHz conundrum. The ever-present "person familiar with the talks" suggests this on the cards. The idea is that by pooling their spectrum the operators could release some for rivals to use, as recommended by Lord Carter's report.

Radio sites are hard to come by in the UK, and networks have very similar requirements. So it's unsurprising they often share sites. The increasingly-out-of-date sitefinder database demonstrates that all the UK operators happily share radio sites, and always have done.

Sharing radio networks is more complicated: in 2007 Orange and Vodafone announced a network sharing scheme, but dropped the plan when no-one was looking. In fact the only significant network sharing in the UK is between T-Mobile and 3. This is very much a work in progress.

The idea that O2 and Vodafone might pool their 900MHz spectrum for the benefit of the competition is as likely as the respective CEOs stapling their ears to a horse for fun. Not to mention that Ofcom has threatened to take just 10MHz of spectrum from Vodafone and O2. This is a "derisory" amount, according to the competition, and leaves each network with 29.8MHz of spectrum around 900MHz to play with. Unless Ofcom significantly rewrites its proposals, neither operator will have any spectrum shortage soon, so there is no reason to pool on those grounds.

Then what is the FT talking about?

UK operator 3 has made it abundantly clear that it is unhappy with the opportunity to bid for 10MHz of spectrum - the argument is that it (along with the other operators) paid a fortune for 2.1GHz licences on the basis that 3G services wouldn't be allowed anywhere else. Lord Carter, and everyone else, wants to allow 3G services to operate at 900MHz, which is all well and good, except that 3 and T-Mobile don't have any 900MHz spectrum and feel distinctly left out.

So Vodafone and O2 need to look as though they are working hard to co-operate, and that they are desperately short of the radio spectrum they need to connect the rural communities to their shiny 3G networks The operators have neatly managed to convey this sentiment through the FT piece without making any formal comment on the matter. ®

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