BT edges towards its own branded 4G mobile network via O2.
It’s no surprise to us that BT has won a lucrative 10 year 4G support contract from O2 worth £500 Million per annum as this is what they excel at. The contract involves BT setting up and overseeing a fibre-optic “backhaul network” to carry 4G voice and data traffic between masts and base stations.
O2 already has a vast number of base stations and masts in place for 3G mobile services and some of these will need updating and some replacing as O2 prepare for 4G. O2 has a mast sharing agreement in place with Vodafone but at this time it is not clear whether Vodafone would also use the BT backhaul network or select another partner.
O2 are planning to launch their 4G mobile network sometime during Q3 or Q4 this year and this recent development may see BT launch a 4G mobile network in partnership with either O2 or Vodaphone or even both. O2 forecast mobile internet speeds of up to 10 times faster than standard 3G at the time of launch. Currently, only EE has launched 4G in the UK and this has been up and running since November, 2012.
BT won a sizeable chunk of 4G frequency in the recent Ofcom 4G auction and has asked the main UK operators to respond to a tender to support BT in the launch of its own 4G mobile network. Ofcom confirmed on completion of the UK’s 4G auction that mobile operators could exchange or purchase each others spectrum provided it still met Ofcom’s original conditions outlined in the auction.
The above means that the winner of the BT tender could share BT’s 4G spectrum as part of any deal. This would undoubtedly appeal to O2 as they gained the least 4G spectrum from the auction and some may argue that the amount they won is not adequate for total 4G UK coverage.
The ideal partnership would be BT building a “4G backhaul network” for O2 ( this is now confirmed ) with O2 setting up a “branded 4G mobile network for BT. We expect to hear more on this soon.
