Faced with the challenge of building high-speed mobile data networks in four countries, mobile phone operator mmO2 PLC of Uxbridge, England, is going to "do it once" to save money, the company announced Tuesday.
The uniform architecture for its GPRS (General Packet Radio Service) and future 3G (third generation) networks will mean better quality of service, innovative pricing and enhanced services for users, according to a statement from mmO2.
The company plans to build a single broadband mobile data network to carry multimedia services for its operations in the U.K., Germany, the Netherlands and Ireland, and will consolidate existing network supply contracts for its different divisions into relationships with two principal equipment manufacturers: Nokia Corp. of Espoo, Finland, and Nortel Networks Corp. of Brampton, Ontario, it said.
It has a number of wholly owned national subsidiaries: Viag Interkom GmbH & Co in Germany, Digifone MMO2 Ltd in Ireland; Telfort Mobiel BV in the Netherlands, and BT Cellnet Ltd. in the U.K. It also owns Manx Telecom Ltd. on the Isle of Man, where it launched its first 3G network. The relevant subsidiaries have licenses to operate 3G networks in Germany, the Netherlands and the U.K., and Digifone has applied for one in Ireland, mmO2 said.
Using electronic-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. Roaming is seen as one of the keys to the success of the voice telephony service GSM (Global System for Mobile Communication), and the lack of it as one of the biggest obstacles to the development of mobile data services such as GPRS.
Building a single, core broadband network with one network management system will enable mmO2 to reduce expenditures across all its networks (GSM, GPRS and 3G) by 22 percent, a saving of 600 million (US$528 million) over five years, it said. 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 U.K., the Isle of Man, Germany, Ireland and the Netherlands, and it will also supply the core network infrastructure and at least 30 percent of the base stations for future 3G networks in the U.K., Germany and Ireland, according to a Nortel statement.
Nokia will supply a further 30 percent of the 3G base stations in those territories, according to a Nokia statement.
The two suppliers will compete for the contract to deliver the remaining 40 percent of the 3G base stations, mmO2 said.
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 percent, mmO2 said.
L.M. Ericsson Telephone Co. of Stockholm also gets a slice of the cake, as mmO2 signed 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.
The combined value of the deals with Ericsson, Nokia and Nortel is 2.2 billion, mmO2 said.