Orange and T-Mobile may build brand new UK network
Reported to be in talks with Huawei and Nokia Siemens for multi-standard project
Published: 30 March, 2010
READ MORE: M&A | UK | T-Mobile | Orange | LTE
Now that T-Mobile and Orange have obtained regulatory clearance to merge their UK arms, details will start to emerge of how the new company - which will be the country's largest cellco - will look. While the focus during the approval process was often on cost efficiencies, the combined entity is also eyeing major investments in order to gain market reach and scale, and keep challengers O2 and Vodafone, the current leaders, at bay. It is reported to be in talks with vendors about a brand new network to support extra capacity, plus LTE services, in various bands.
Reports in Mobile News say the companies are in advanced discussions with Nokia Siemens and Huawei, which would be a significant boost for both vendors. NSN needs to raise its profile in early LTE contracts, especially in its European home region, against the relentless march of Ericsson and Huawei. And despite its growth, Huawei still needs to establish itself as a tier one supplier to Europe's largest operators, which have long standing ties to their local vendors, and have sometimes used the Chinese entrant as a second string, partly to put price pressure on their incumbents.
T-Mobile UK is reported to be conducting feasibility studies for a new network, supporting GSM, 3G and LTE services in the upcoming new mobile spectrum bands, 2.6GHz and digital dividend, also harnessing existing GSM and UMTS frequencies. Such a strategy would be likely to focus on software definable base stations, to give the company flexible choices in terms of the extent and timing of LTE introduction - this would presumably put NSN, with its flagship Flexi product, in a strong position, especially as the low power base station range promises significant energy and opex savings.
The operators will be keeping a sharp eye on the experience of Telenor and Tele2 in Sweden, which have formed a joint venture to build a common LTE network in shared frequencies from 900MHz to 2.6GHz. As Mobile News points out, this project, and others by 3 in Austria and Telenor in Norway and Denmark, rely on full rebuilding of the networks around a common core and cost efficient modern hardware. However, Orange insiders would not be drawn on the probability of such a radical plan, and just commented that the new JV would require close cooperation with suppliers in order to merge its current networks and look towards 4G.
An Orange spokesperson said: "Combining the two networks would be a significant integration project which would require expertise from the best in the market to guarantee a smooth and successful transition." Many believe this would involve almost as much effort and disruption as a rebuild, and for far less impressive returns, given that 'T-Orange' could have the opportunity to create the fastest and most efficient system in the UK and leapfrog its rivals.
The companies' merger closes on April 1.
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