Vodafone and Telefonica have announced plans to join forces with the ultimate goal of creating a shared 4G grid in the UK.
According to the Beeb, the companies hope to improve coverage and speed out 4G rollout by 2015, two years ahead of Ofcom’s 98 per cent coverage requirement, set for 2017.
Of course, Vodafone and Telefonica will continue to compete, but in doing so they will share the same network infrastructure. However, the deal will cut costs for both operators, which sounds like a pretty good idea given weak consumer spending in Europe.
Ovum’s principal analyst Jeremy Green believes that the shared grid makes sense.
“This is an entirely sensible move by Vodafone and Telefonica in the UK,” Green said. “Most countries would end up with only two physical LTE networks.”
“It follows on from the merger of T-Mobile and Orange in the UK into Everything Everywhere,” he said. “If Vodafone and Telefonica had not also embraced sharing in this way they would have been at a competitive disadvantage. As it was, they were able to build on and extend the relationship that they already had through Cornerstone, their existing joint venture. This sets them up well for the 4G rollout and will help them catch up on 2/3G rollout too.
“Both operators stress that it has no implications for their relationship elsewhere, and that they will continue to compete on services. This move follows the logic of network economics and technological possibility, and is what the near future is going to look like,” Green said.
Although 4G is becoming the next big thing stateside, Europea doesn’t appear to be as interested. There is still a lot of clinging to 3G and there does not appear to be much demand to upgrade for the time being. This probably has something to do with the fact that 3G coverage in Europe is excellent for the most part, while 4G is rather limited. Of course, in the UK, the 4G rollout is dragging its heels and has been criticised from many corners.
Unlike their European counterparts, a lot of US consumers opt for pricey unlimited data plans on high-end devices, since they seem to believe that austerity is a European country neighbouring Austria and Italy.