Operators in line for £1bn Network Rail deal

Operators in line for £1bn Network Rail deal

EE, O2 and Vodafone are tipped to be in the running for Network Rail’s £1bn partnership deal to provide high speed mobile connectivity on Britain’s railways, according to industry sources.

Competition for the lucrative ten year contract revved up this week with news that Network Rail has selected a handful of bidders to go through to the final stage of the competition.

The UK rail authority has issued a Request for Proposals (RfP) to a shortlist of contenders with a view to choosing a preferred partner by this summer.

The winning bidder’s brief will be to provide high speed mobile connectivity across Britain’s rail network. The first part of the contract will focus on providing mobile connectivity across the most densely used parts of the rail network which makes up around 30% of the  rail network. This will deliver improved mobile services in commuter belts to around 70% of all of Britain’s rail commuters by 2019.

The partner will provide a range of spectrum and all equipment needed to provide improved mobile connectivity on trains across the rail network and in stations.

The contract offers a major commercial opportunity to mobile operators and MVNOs with Network Rail estimating the deal to be worth between £0.5bn and £1bn in revenue for the successful bidder. There is also potential for the deal to be extended by another five years to 2024.

Chris Docker, head of commercial at Network Rail Telecoms, said: ‘Network Rail’s Request for Proposals is a key step in the tendering process to secure a mobile network partner, enabling us to deliver these connectivity improvements on around 30% of Britain’s railway.

‘During summer 2014 we plan to unveil our new, national mobile telecoms partner and update passengers on what and when they can expect from this exciting investment which aims to meet the growing demand for reliable connectivity on the move.’

Docker added: ‘Under the plans, 70% of the travelling public should benefit from this new technology by 2019, with passengers expected to begin noticing improvements during 2015.’

John Delaney, head of IDC’s European mobility team said network operators are likely to be at the forefront in the race to win the contract: ‘Clearly this is an opportunity for all the mobile operators and BT could be in contention now it has LTE but I would not think MVNOs are likely contenders since they will only add an extra layer of management, although Virgin could be the exception because of its existing interests in rail transport.’

However Phil Kendall, director of global wireless at Strategy Analytics, said operators may need to team up with other providers such as systems integrators to be able to offer a comprehensive service to commuters.

He said: ‘On one level it seems hard for one operator to win this business. I think any operator would need to partner with a systems integrator to make this work.'


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