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Vodafone and O2 to merge UK networks for 4G push

Deal to save more than £1 billion

Vodafone and O2 to merge UK networks for 4G push
The second and third largest mobile operators in the UK have announced they are to pool their networks to improve the forthcoming roll out of 4G mobile broadband to their customers.

The decision, which analysts believe could save both companies around £1 billion or more, will see the two carriers share their network of around 18,500 masts across the country to enable 98 percent coverage of the population by 2015.

Everything almost everywhere

"This partnership will close the digital divide for millions of people across the country and power the next phase of the smartphone revolution," said Vodafone CEO Guy Laurence.

"It will create two stronger players who will compete with each other and with other operators to bring the benefits of mobile internet services to consumers and businesses across the country.

"This partnership will improve the service that customers receive today and give Britain the 4G networks that it will need tomorrow."

The move follows a full merger by rivals Orange and T-Mobile in the UK to create Everything Everywhere, which became the country's largest operator as a result.

"Exceptional customer demand for the mobile internet has challenged the mobile industry to consider innovative solutions to building a nationwide network that will be fit for our customers in the future and support the products and services that will truly make Britain digital," said O2 CEO Ronan Dunne.

"One physical grid, running independent networks, will mean greater efficiency, fewer site builds, broader coverage and, crucially, investment in innovation and better competition for the customer."

Money saver

According to Ovum analyst Emeke Obiodu, the deal will see both parties saving at least 25 percent of their network costs.

"Considering that Vodafone UK spent £575m in capital expenditure in the year ended March 31 2012, this could lead to savings of over £100m per year,” he told Computing.co.uk.

“Over the three years from now until 2015, when both parties expect to achieve 98 per cent indoor population coverage across 2G and 3G, the combined potential savings would be in excess of £600m."

[source: Vodafone (PDF)]

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.