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A major EUR2.2 billion project by mmO2 to build one mobile network linking Ireland, the UK, Netherlands and Germany could slash mobile charges in those areas.
MmO2, which wholly owns its mobile networks in all four countries, announced a significant strategy change that sees it abandoning relationships with more than 15 subcontractors in those territories. Nortel and Nokia have been chosen to build an end-to-end mobile network that will cater for fast mobile data (GPRS) as well as an advanced third-generation (3G) mobile network that spans all four territories, subject to O2's being granted a 3G licence in Ireland.
Nortel is to provide the core network infrastructure for GPRS and 30 percent of the radio technology, including base stations, for the 3G network. Nokia will also provide 30 percent of the 3G equipment, and the remaining 40 percent of the infrastructure will be up for competitive bid between Nortel and Nokia. The total equipment spend is EUR2.2 billion.
"Construction will start very soon; we'll have the GPRS network by October in all territories," an mmO2 spokesman told ElectricNews.Net. "Currently we expect to introduce 3G in the UK and Germany in the middle of next year, and Ireland is subject to a licence being awarded, but that will follow."
Because mmO2 will own 100 percent of its infrastructure in all four countries, the company would have the option to totally eliminate roaming fees or international call rates between its customers in its territories.
Roaming fees -- the cost users pay to receive or make a call when travelling abroad -- are set by whichever operator that is used when abroad. But under the new deal, where mmO2 can route calls over its own wholly owned network, calls from a Digifone customer in Ireland to a BT Cellnet customer in the UK, for example, should cost no more than a call between two Digifone customers in Ireland.
The spokesman declined to give details or a date when its new pricing packages would be announced, but said these are expected later this year, and agreed that it should be cheaper for its customers to roam. Pricing on data services, including sending text or picture messages, could also be standardised.
"It's too early to say, but we will be looking at new pricing packages and standardised pricing where appropriate across our footprint," he said. "Particularly business customers, for example, may want one price across all those countries."
"Roaming charges are not going to disappear, but we can cut charges and it will apply probably for new data products, for example sending a picture with a text message. I wouldn't like to give the impression that all voice calls are going to be slashed in price over night," he said.
On mmO2's current GSM network, Nokia currently provides about 70 percent of the equipment and will have the opportunity to boost that percentage, the company said.
Also on Tuesday, mmO2 said that it would now outsource day-to-day operation of its network in the Netherlands to Ericsson, and said it was maintaining a "flexible approach" to setting up similar outsourcing and managed services initiatives in its other territories.
The company said it expected "dramatic economies of scale" including a 22 percent cost saving, totalling EUR600 million over five years, on its network expenditure. Having a single network in all countries should also make it faster for mmO2 to roll out new products in all territories, since a device or service can be tested once and introduced network-wide.
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