Vodafone to spend £2.5M per day on UK network

Vodafone UK said it will spend £900 million ($1.38 billion) on its network this year, or £2.5 million per day, to support the launch of its LTE network by late summer and drive the integration of fixed and mobile infrastructure.

The UK operator said this would represent a 50 per cent increase in its network spending this year, and said it plans to create an integrated fixed and mobile network using the fixed network of Cable & Wireless Worldwide it acquired for more than £1 billion last year.

"This network will support businesses and public sector customers as they look to create innovative services, simplify their operations, increase productivity and reap the benefits of better ways of working--allowing their people to work from any location," the operator said.

Vodafone has generally been pursuing a fixed and mobile convergence strategy across Europe, and recently signed a deal with Deutsche Telekom to use the German incumbent's VDSL network. Rumours persist that Vodafone is also still interested in buying German cable operator, Kabel Deutschland.

The network investment comes as Vodafone prepares for the launch of LTE services by the end of the summer. The company has already spent £802 million on spectrum in the recent Ofcom auction, and said it is well advanced with preparations for the next generation of mobile data services. It added that it has already pledged to deliver indoor coverage to 98 per cent of the UK population by 2015.

As things stand, EE is still the only operator to offer LTE services in the UK. Vodafone delayed its rollout to the end of the summer to allow it more time to build coverage, indicating that the operator wants to be able to compete fully with EE on LTE when it finally does launch services.

Network quality will be a key differentiator when all four LTE operators are able to offer services later this year. The angry reactions to a major network outage by 3 UK this week indicates the degree to which operators cannot allow their networks to fail. 3 UK has built its business on reasonably priced, all-you-can-eat data plans, and targets the kind of heavy users who are much less forgiving when they are unable to access services.

Meanwhile EE continues to drive its LTE rollout across the country, announcing that its services are now available in 74 towns and cities. The operator got a boost from independent network testing company RootMetrics, which ranked EE highest for mobile internet and overall combined performance in Manchester, Hull and London after network experience tests.

"EE's mobile internet speeds in London were the second fastest we've recorded in the UK to date; EE's speeds in Manchester were slightly faster," RootMetrics said. It added that its latest tests in London indicate that O2 UK, 3 UK and Vodafone all demonstrated increased data download and upload speeds compared to the previous test cycle.

For more:
- see this Vodafone release
- see this EE release
- see this RootMetrics report
- see this Bloomberg article
- see this FT article (sub. req.)
- see this PC Advisor article

Related Articles:
3 UK mulls pooling 800 MHz spectrum with EE, may speed up LTE launch
EE suffers revenue decline in Q1 despite head start with LTE
Report: UK operators will need to trade LTE spectrum to set mobile strategies
Analysts: UK operators underpaid for LTE spectrum, for a variety of reasons
UK LTE spectrum auction draws £2.34B, below government expectations
Analyst: Vodafone, O2 have most to lose in UK LTE spectrum auction

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