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UK regulators approve Vodafone and O2's network merger

UK regulators approve Vodafone and O2's network merger
Daniel Cooper
Daniel Cooper|@danielwcooper|October 1, 2012 11:17 AM

Observing the mantra that the enemy of its enemy is its friend, Vodafone and O2 have gained regulatory approval to begin merging their cellular networks to better compete with Everything Everywhere. As such, they can begin spinning off infrastructure and towers to a new company called CTI, which will manage both company's hardware as a single network. It's hoped the new tie-up will cover 98 percent of the country and enable LTE services to roll out two years ahead of Ofcom's 2017 deadline. Worried about another awkward T-Mobile and Orange-style merger? Don't be, since in every other respect, the pair have pledged to operate as competing entities in a quest for your custom.

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Telefónica UK and Vodafone UK welcome the news that the regulatory authorities have given them the green light to proceed with previously announced plans to strengthen their existing network collaboration. The two companies will now pool the basic parts of their network infrastructure to create one national grid which will support two independent and competing networks delivering mobile coverage and mobile internet services to the vast majority of UK households.

The scheme will deliver real benefits for today's mobile phone users, offering indoor 2G and 3G coverage to 98% of the UK population by 2015. It will also lay the foundations for two competing 4G networks*, delivering nationwide services that meet the regulatory requirement of 98% population coverage, up to two years before Ofcom's deadline of 2017.

Ronan Dunne, CEO Telefónica UK said: "This partnership is about working smarter as an industry, so that we can focus on what really matters to our customers – delivering a superfast network up to two years faster than Ofcom envisages and to as many people as possible. One physical grid, running independent networks, will mean broader coverage and, crucially, investment in innovation and better competition for the customer. We look forward to Ofcom's spectrum auction and the release of 800 spectrum."

Guy Laurence, CEO Vodafone UK said: "This is excellent news for British consumers, businesses and the wider economy: we are promising indoor coverage for 98% of the UK population across all technologies within three years. We will bring the best mobile coverage that this country has ever enjoyed to more people than ever before. Our existing customers will benefit on the devices that they have today and we will lay the foundations for the real 4G network they will want tomorrow."