What are these two competitors up to?
Mobile: 3 and T-Mobile have set up a separate company called Mobile Broadband Limited (MBL), which they both have a 50% share in. Gurdenli: We will save £2bn between the two companies by combining our network infrastructure.
What is being shared?
Mobile: The operators are sharing three things: equipment, such as the base stations, masts and cell sites; transmission from the cell site to the core network and site management, which involves planning and building masts.
Are 3 and T-Mobile doing all the leg work?
Gurdenli: Most of the process is out-sourced. Nokia-Siemens Networks provides the shared equipment, following a deal agreed in May. BT handles the high-speed transmission from the sites after signing a deal a fortnight ago. The company provides transmission from 13,000 cell sites to 3 and T-Mobile’s core networks. The network operation is managed by Ericsson. There are two more of these types of contracts covering site management – one involves the real estate and the other deals with outsourcing the planning and building side.
Which individuals run MBL?
Gurdenli: It is important to remember that MBL is a separate joint venture and, although it consists largely of people who used to work for T-Mobile and 3, they are no longer employees of either company.
Mobile: The management team was created in January with former T-Mobile man Graham Payne as managing director of MBL. There is a small management team made up of between 25 to 30 back-office staff that are based in Amersham.
How far along is the network share plan?
Gurdenli: The first call was put through a shared site in February after completing the initial trials. MBL began the process of pulling down duplicate cell sites in August. The target is to have 5,000 sites decommissioned by 2010.
There are currently 18,000 between the two companies, so it would come down to the best 13,000 that provide the strongest and broadest coverage. Our responsibility is to have the leanest operation possible.
Didn’t Vodafone and Orange have similar plans?
Mobile: Vodafone and Orange were the first to talk about network share, but the plan failed to gain momentum after the two companies could not come to an agreement on the relative value of their respective network assets.
In the end, a diluted version of the deal was agreed that entailed sharing sites, so no masts are shared.
Gurdenli: Unlike Vodafone and Orange, we decided to keep quiet. We only came out when we had a contract in January.
I would have liked to see Vodafone and Orange succeed with their network share. It is good for the industry, the customer and the environment. It lowers the cost of production without lowering competition.
Would MBL welcome O2 if it wished to enter the company?
Mobile: O2 started building its 3G network much later than the other networks. The real infrastructure work only really began this year, fuelled by the onset of the iPhone 3G and the interest surrounding mobile broadband. But O2’s 3G network is still behind the competition.
Gurdenli: Right now our hands are full with deep network sharing, but that doesn’t rule out further competition. We continually have discussions with O2 on what the right things to do are. There are always discussions on how we can reduce the number of cell sites. But O2 is currently in a different space in terms
of its network.