The mobile telecommunication subsidiaries of British Telecommunications PLC (BT) and Deutsche Telekom AG (DT) plan to cooperate on the rollout of their 3G (third-generation) mobile networks, the companies announced on Tuesday.
The move will reduce costs, and may speed deployment of new services to thinly-populated areas, the companies said.
The companies plan to share new and existing base stations, including sites, masts and antennas, in major urban areas. The companies also intend to cooperate on the initial build of 3G infrastructure and to allow users to roam between their networks.
In the U.K., BT Cellnet Ltd. has signed a memorandum of understanding to work with DT's One2One PLC. In Germany a similar agreement has been reached between DT subsidiary T-Mobil and BT's Viag Interkom AG. BT expects a definitive will be signed in the third quarter, after detailed planning activities have been concluded, it said in a news release.
Teaming up with DT could save BT Cellnet about 2 billion euros (US$1.69 billion) over 10 years in 3G-network build costs, according to the BT spokesman.
In the past DT has said that the 3G rollout will cost 5 billion euros in Germany and 4 billion euros, according to T-Mobil spokesman Philippe Schindera. The company now expects savings of up to 30 percent, or 2.7 billion euros.
"The agreement will allow faster, less expensive deployment of 3G, but it is too early to say if the service will be cheaper for the customer," Schindera said.
BT also hedged its bets on whether customers would see the cost savings: "We will price the service according to market conditions," said the BT spokesman.
According to DT, 3G service should be available in Germany in 2003 and in the U.K in late 2002.
"This agreement doesn't mean 3G will be available quicker overall, but that it will be available sooner in some fewer populated areas," said Schindera.
For BT, the goal is to start offering 3G services in some areas by the end of 2002, start of 2003, according to the spokesman. He couldn't say whether BT would deploy services more quickly as a result of the deal with its German counterpart.
One way in which the companies might speed service deployment is by using one another's existing networks. The memorandum of understanding between BT Cellnet and One2One also allows One2One customers to roam onto BT Cellnet's 2G (second-generation) GSM (Global System for Mobile communications) network as well as its GPRS (General Packet Radio Service) 2.5G network in selected areas of the U.K., BT said.