MmO2 to spend £1.35bn building high speed European networks

Mobile phone operator mmO2 is spending £1.35bn to create a uniform architecture for its GPRS (General Packet Radio Service) and...

Mobile phone operator mmO2 is spending £1.35bn to create a uniform architecture for its GPRS (General Packet Radio Service) and future 3G (third generation) networks in Europe.

The company has announced a "do it once" strategy to save money as it rolls out high-speed mobile data networks in four countries.

The uniform architecture for its GPRS and future 3G networks will mean better quality of service, innovative pricing and enhanced services for users, according to mmO2.

The company plans to build a single broadband mobile data network to carry multimedia services for its operations in the UK, Germany, Holland and Ireland.

It will also consolidate existing network supply contracts for its different divisions into relationships with two principal equipment manufacturers - Nokia and Nortel Networks.

Using e-commerce technology to work closely with these two suppliers, mmO2 hopes to drive down capital costs across all its subsidiaries. The contract consolidation comes at the end of a six-month review of mmO2's network and suppliers.

The "do it once" approach to network design will also enable mmO2 to enhance mobile data roaming across its networks in Europe, the company said.

Building a single, core broadband network with one network management system will enable mmO2 to reduce expenditure across all its networks (GSM, GPRS and 3G) by 22%, a saving of £370m over five years. It will also mean that services developed in one country can be rolled out quickly in others.

Nortel will extend and upgrade mmO2's GPRS network in the UK, the Isle of Man, Germany, Ireland and the Netherlands and it will also supply the core network infrastructure and at least 30% of the base stations for future 3G networks in the UK, Germany and Ireland. Nokia will supply a further 30% of the 3G base stations.

The two suppliers will compete for the contract to deliver the remaining 40% of the 3G base stations.

Nokia remains the main equipment supplier for mmO2's existing GSM networks and will have the opportunity to increase its share of that business from the current 70%, mmO2 said.

Ericsson also gets a slice of the cake, with mmO2 signing a letter of intent to outsource mobile network operations at its Telfort subsidiary. As part of that deal, Ericsson will supply 3G network infrastructure and base stations in the Netherlands. The companies expect to reach a firm agreement in July, Ericsson said.

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