T-Mobile and 3 are to combine their 3G radio networks in the UK, increasing coverage for both companies and reducing running costs.
The agreement follows a similar deal between Vodafone and Orange, announced earlier this year. Rather than being a coverage issue for these two operators however, the main driver was cost-reduction.
T-Mobile evolved from One-2-One, a company whose business model was based on providing coverage within London's M25, and while 3 has been busy building a 3G-only network it started a lot later than the competition. Both companies have significant holes in their 3G coverage of the UK landmass.
3 operates around 7,500 base stations, which will rise to 13,000 after the merger. This would appear to compare badly with Vodafone's 15,000 (as of January this year), but the latter includes 2G-only cells while 3 is only interested in 3G technologies.
Running separate networks made sense when companies competed on coverage, but today's customers are much more interested in the cost of calls and network reliability than if they can stay in touch from the north coast of Scotland. So combining network infrastructure makes a lot of sense.
But 3, and T-Mobile, also want the to expand their ability to offer in-home broadband. O2, Orange and Vodafone all offer ADSL connections, while T-Mobile and 3 are dependent on their 3G capability, and keen to offer mobile broadband as a competitor to fixed technologies.
The frequencies released by the switch off of analogue TV, and more flexible spectrum licensing, are going to create opportunities for new entrants in the mobile broadband market, so existing operators are going to want to make the most out of their assets while they're still worth having. ®