Ericsson scores with 3/T-Mobile, while 3 gains Irish contract

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Ericsson scores with 3/T-Mobile, while 3 gains Irish contract

By CAROLINE GABRIEL

Published: 1 December, 2008

READ MORE: Ericsson | T-Mobile

3G-only operator Hutchison 3 is busily reinventing itself as a wireless broadband supplier rather than just a mobile carrier, and this involves significant changes to its business model and cost structure. In the UK, it has put its networks into a RAN sharing venture with T-Mobile, which has now selected Ericsson to manage its services; and in Ireland, it has won a deal to roll out broadband to rural areas, scoring over fixed incumbent eircom.

Such moves show 3 shifting away from traditional models and priorities, focusing on web services and underserved broadband user bases, rather than differentiation in the network itself, at the risk of becoming a 'bitpipe'. So outsourcing is likely to be a strong feature in all its territories, as seen in the UK.

Here, its 3G RAN sharing deal with T-Mobile, called Mobile Broadband Network Limited (MBNL), has already selected Nokia Siemens to supply its infrastructure, saving costs with combined procurement and the decommissioning of about 5,000 cell sites. Now it has signed a four-year managed services deal with Ericsson, outsourcing the operation and maintenance of the consolidated network, as well as T-Mobile's 2G system.

In a statement, Ericsson said the deal will allow MBNL to control operational expenses and deliver high service levels at a time when the 3G network consolidation is moving into the mass deployment phase. Around 80 employees from T-Mobile have been transferred to Ericsson as part of the deal. The vendor already has separate managed services contracts in place with the two cellcos.

MBNL has finished a pilot of integrated cell sites in the Leeds and Bradford area in northern England. The venture says it will create the UK's most extensive 3G network by 2010, targeting "close to complete" universal population coverage and significantly improved in-building signal strength.

Over the Irish Channel, 3 Ireland has won a contract worth €40m from the country's government to supply wireless broadband to the country's rural areas. The project, known as the National Broadband Scheme (NBS), is scheduled to go live in mid-2010, and aims to deliver high speed fixed and mobile internet services to the estimated 10% of the population that lives in remote areas with limited fixed line broadband.

Eircom has reportedly lost out, while the only other bidder, BT Ireland, pulled out of the bidding process in July. BT had planned to use WiMAX for the network but reportedly decided this would have required building an excessive number of base stations, with uncertain ROI. However, as a 3 Ireland partner, BT is still expected to be involved in the project. eircom said it was "extremely disappointed".