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18th December , 2007

Europe UK : 3 UK and T-Mobile (UK) have signed an agreement to combine their 3G access networks in a ground-breaking collaboration that will lead to almost complete population coverage for 3G services across Britain by the end of 2008 with significant fill in and improvement to dense urban in-building coverage in 2009.

As the world's largest known active 3G network sharing agreement, this will significantly increase both operators' 3G network quality and coverage, accelerate the provision of new high-speed mobile broadband services and deliver substantial cost savings as well as environmental benefits.

By combining their 3G access networks (the mobile masts and infrastructure that connects to each operator's separate core network) T-Mobile and 3 UK will create Europe's most extensive high-speed downlink packet access (HSDPA) network. Today's agreement offers customers comprehensive mobile coverage in the first stage of joint development in 2008 and further improvements to quality of service in 2009. It furthers both companies' joint commitment to deliver true mobile broadband internet access in addition to reliable voice and text services.

Although masts and the 3G access networks are being combined, each company's core network and T-Mobile's 2G network will not be shared. Both parties will retain responsibility for the delivery of services to their respective customers and use their own frequency spectrum.

High-speed mobile broadband and data services are set for rapid growth as mobile progressively becomes the individual's primary means of accessing the internet. Nationwide 3G coverage is essential to meet this growing demand. Blanket population coverage becomes rapidly achievable if individual operators split the investment required and share operating costs. Integration of radio access networks will give a further boost to the pace of development of 3G services, reduce the duplication of costs and the proliferation of mobile masts and extend 3G coverage for the first time to some of the more sparsely populated areas of the country.

Jim Hyde ( above ), Chief Executive of T-Mobile UK, said:
"3G is a transforming technology, but this will be the first time that a 3G access network in this country is able to achieve both the reach and the capacity to meet the needs of the future. Our aim, quite simply, is to ensure the customer is always best connected. From 2008, customers can expect to have access to high-speed 3G services in a greater number of locations than we can currently serve over our existing infrastructure. By collaborating with 3 UK, we can achieve this quicker and with greater economy - that's a win-win in anyone's language."

Kevin Russell, Chief Executive Officer of 3 UK, said:
"High-speed mobile broadband is going to be a key enabler for both consumers and businesses looking for convenient access to Internet-based services wherever they are. This market-leading initiative will accelerate the adoption of new services in a timescale each of us could not have achieved on our own. It also enables us to cost effectively meet customer demand for faster speeds, wider coverage and greater capacity that is starting to arise as mobile devices become the most cost-effective and convenient route to access the Internet."

Martin Garner, Director of Wireless Research at Ovum, said:
"Network sharing has the potential to change the economic model of operators and make a reality of high-quality, high-speed mobile broadband - better, faster and more economically than could otherwise be achieved. Shared opex and capex considerably improves the economics and enables a more practical route to better network coverage, and in particular in-building coverage. Our research shows that the number of 3G users can be expected to grow by over 240 per cent over the next four years."

The shared network is scheduled to be completed in just over two years and will provide blanket UK population coverage capable of supporting high-speed 3G mobile broadband services - a commitment well beyond the 3G licence obligation of 80 per cent population coverage that both T-Mobile and 3 UK already comfortably exceed. The combined 3G access network will share physical assets and offer greater capacity than the two operators' existing independent 3G networks.

A 50:50 joint venture company called Mobile Broadband Network Limited has been set up and will supervise the creation and operation of the joint network on behalf of both companies. In addition to having a direct positive environmental benefit, plans to decommission over 5,000 duplicate sites from both parties' combined existing cell site portfolio will result in significant savings in rent, transmission and other cell site operating costs. Together with the lower future capital expenditure requirement, the combined savings are estimated at £2 billion over 10 years.

Under the joint venture contract, which runs to the end of 2031, both operators will work as equal partners in planning the development and operation of the integrated access network while remaining competitors in the UK mobile wholesale and retail markets.

Mr Hyde added:
"To achieve what we have requires a good working relationship and strong support up to the most senior level. Converting early discussions into a formal operational agreement in under a year has been an exceptional achievement and an indication of our joint commitment to be the first UK mobile operators to make network sharing a reality."

Mr Russell said:
"I am delighted that 3 is teaming-up with T-Mobile to deliver this major step forward for the UK mobile market. It is exciting to consider that within a short period of time wherever you can get 2G mobile coverage today you will be able to access the internet at broadband speeds from a 3G mobile device."


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