EE and Three cost-sharing spurs 4G drive
EE and Three have struck a network-sharing deal for the next stage of the rollout of superfast mobile broadband, with the British groups together set to invest a further £1bn to complete their telecoms infrastructure investment.
The deal will accelerate the rollout of 4G networks in the UK, as well as bringing down the cost for the two groups, and revises the terms of a prior agreement on existing network infrastructure. Three originally shared networks with T-Mobile, which continued after the company was merged with Orange in 2010 to form EE.
EE and Three, the largest and smallest mobile operators in the UK respectively, have agreed to build the next part of their basic 4G networks together, including sharing mast infrastructure and transmission costs between the masts and the main national networks.
However, the new deal allows greater flexibility for the two groups to create differences in the quality and coverage of 4G, with EE in particular keen to build on an advantage in its ultra fast mobile services having reached the market first with 4G last year. People close to EE said it was seen by the group as creating a greater separation between the two networks, which have been linked more closely together with similar coverage.
The two companies have different 4G plans, unlike under the previous agreement which linked the pace of network investment. The antennas, spectrum and the core network will also be different for the two groups.
EE’s total investment in building a 4G network will amount to about £1.4bn. It has already upgraded large parts of the network using its own money, but the costs will now be shared with Three, which has committed £500m to network investment in the next three years.
The deal marks the beginning of Three’s main 4G investment, although EE is far along its own plans.
EE will offer 4G services to close to 70 per cent of the British population this month, while Three wants to reach 50 cities by the end of 2014 and 98 per cent coverage by the end of 2015. All customers of Three will be transferred to a 4G contract by the end of the quarter, even if they do not live in areas yet covered with the necessary infrastructure.
Rapid network coverage of 4G has not so far been prioritised by Three, which has committed to giving the services away for free as part of its mobile tariffs. EE, however, is charging a premium for additional 4G services.
David Dyson, chief executive of Three, said the company could afford to wait until more customers wanted superfast mobile broadband.
Mr Dyson said: “Beyond two years, apps and services will develop to make 4G more relevant. Right now, a 3G network can provide most of the service for most customers.”