The operator -- the joint venture of Orange UK and T-Mobile (UK) -- has a major program underway to consolidate the two partners' national 2G and 3G networks. It outlined the progress and plans for this project at its first investor day event on Tuesday. (See UK Mobile Giant Flexes Its Muscle, Everything Everywhere Does Femtos , and Orange, T-Mobile Do Everything Everywhere .)
Part of the network integration program involves streamlining equipment supplier relationships and renegotiating terms with managed services providers, which will contribute to the operator's target to save £466 million (US$737 million) in operating costs annually by 2014 and to cut £200 million ($316 million) from its capital expenditure budget over a five-year period.
"By the end of next quarter I will have decided and placed all the network equipment contracts that will allow us to deliver the program, so that we hit the ground running at the beginning of next year in terms of consolidation," said Emin Gürdenli, Everything Everywhere's VP of networks, during the investor day presentations.
And while the UK operator didn't set a timeline for rolling out LTE (it doesn't have the spectrum yet), Gürdenli wants all of his equipment vendors to support the next-generation mobile broadband technology.
"We will have taken the opportunity to make sure that LTE capability is already built in to any new equipment we buy, whether it's for the purpose of 2G modernization or 3G integration," he said. "LTE is on the roadmap."
But where does that leave T-Mobile and Orange's current equipment suppliers? [Ed. note: biting their nails, perhaps?]
Some of the radio access and core network vendors that could be affected by Everything Everywhere's supplier review-and-refresh are Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , and Nokia Networks .
"NSN is by far the largest equipment supplier to both T-Mobile UK and Orange UK," says Patrick Donegan, senior analyst at Heavy Reading. "Providing the two networks have a large enough installed base of the Flexi base station, then NSN should be very well placed to secure an extension of its RAN [radio access network] business with Everything Everywhere."
But in the core network, it's possible that there could be more upheaval for existing suppliers.
"The move to a common core network isn’t quite as favorable to an incumbent vendor, though, because a rip-and-replacement program would be less disruptive, so the opportunity for a new vendor to break-in is probably greater on the core side than in the RAN," says Donegan.
Orange + T-Mobile
Everything Everywhere has already started to integrate the networks of Orange and T-Mobile in the UK. Next week, the operator will implement 2G roaming between the two networks, for example.
Here is the rest of the operator's plan, and what it will expect its infrastructure suppliers to deliver:
- By the second quarter of 2011, the operator plans to have seamless roaming for both 2G and 3G networks, which involves having separate core and radio networks with handovers.
- In the third quarter of 2011, the operator will start a three-year RAN consolidation program that will result in a refreshed radio access infrastructure, the decommissioning of duplicate sites, transport service access, and two separate core networks.
- By the second quarter of 2013, the operator expects to have full network consolidation: By that, it means a single 2G and 3G RAN, a common core layer, and a shared services layer.
— Michelle Donegan, European Editor, Light Reading Mobile