Vodafone UK and Orange UK propose radio access network share

The two companies have signed non-binding heads of terms outlining the principles of sharing their respective RANs. The proposal allows the two companies to:

- Continue managing their own traffic independently

- Retain full responsibility for the quality of service they offer their respective 
  customers

- Remain competitors in the UK mobile wholesale and retail markets

The project outlines plans for the two RANs to be combined over a number of years and covers both existing and new build of the companies' 3G RANs. For 2G, the heads of terms commits to exploring opportunities as technical solutions become available.

Bernard Ghillebaert, CEO of Orange UK, said: "This represents an important step in the evolution of the UK mobile market. As the industry matures we must look at new ways to serve our customers and this provides a common sense approach to network roll out and management in the twenty-first century."

Nick Read, CEO of Vodafone UK, adds: "This proposal is industry leading and will enable the two companies to remain vigorously competitive against each other and the market, while realising the proven benefits of network sharing, notably faster roll out of high speed mobile services in the future and the earlier introduction of innovative products."

Shared efficiencies and reduced duplication Long-term shared efficiencies are likely to be realised by jointly managing and maintaining the RANs, as well as the future roll out of RANs of both companies. By combining the two RANs, the long-term intention is to reduce the total number of masts needed in the future to enable customers to use their mobile devices.

The combined RANs would therefore have a smaller environmental footprint. From a business perspective, there will be reduced capital and operating expenditure arising from the fewer number of sites required. These efficiencies will enable more investment in innovative products and services, benefiting customers.

Better mobile coverage for over 30 million* customers Customers will benefit from the long-term improvements to coverage. The coverage of both operators would eventually be combined to offer improved and complementary coverage, particularly in rural areas. As a result customers would be able to use their phones in more places across the UK. RAN sharing will ensure that both companies remain committed to the faster roll out of high speed services.

Continued competition and differentiation in the UK mobile market Competition between the two companies will be unchanged as the core network would remain within the control of each company, enabling each operator to continue offering differentiated products, services and prices within the UK market.

Some specific areas of coverage, such as corporate customer in-building coverage schemes, would remain outside the share and each company will remain free to add additional coverage for its sole use over and above the combined RAN.

Orange UK and Vodafone UK are currently in discussions regarding the appropriate vehicle within which to manage, maintain and build the radio access network for both companies. The structure and terms of any agreement are expected to be determined in the coming months. Vodafone UK's Chief Technical Officer, Paul Wybrow, and, Orange UK's VP of Business Support, Steve Aumayer, are to lead this process.

* combined total of Vodafone UK and Orange UK customers

Principles of RAN sharing: The form of network sharing proposed by the parties relates only to the radio access part of the network (the RAN). The RAN includes mast, antenna, sites, site support cabinet and power supply as well as antennae, combiners and transmission links, Nodes B (3G), BTS (2G) and the radio network controllers which are linked to the core network. The latest developments in technology mean that base stations can now be configured to transmit more than one operator's signal, which leaves each operator free to determine its own service offering using its own spectrum.

As at the end of December 2006, Orange UK had over 17 million customers (15.3 million active mobile customers and over 2 million internet customers). Orange is a key brand of the France Telecom Group, providing mobile, broadband, fixed, business and entertainment services across Europe. It is one of the world's leading telecommunications operators with more than 153 million customers on five continents.

Vodafone UK has 16.9 million customers and is part of the world's largest mobile community offering a wide range of voice and data communications. The company is committed to providing mobile solutions that allow both consumer and business customers to make the most of now. For more information, please visit www.vodafone.co.uk

- Vodafone Group Plc-