O2 hires BT for 4G backhaul

BT has been chosen by O2 to build a new high-capacity network capable of running its future 4G services.

The 10-year contract will see BT Wholesale manage the network for the operator, which will also include additional transmission links between O2’s existing mobile base stations and the new network.

BT is also going to move O2 onto internet protocol (IP) services, rather than the traditional time-division multiplexing (TDM) it is currently running on. The companies claimed this would enable the mobile operator to offer more IP-based services to its customers, as well as cut costs internally.

“With the UK’s 4G spectrum auction complete, UK mobile data traffic is set to grow by more than 400% by 2016,” said Adrian Di Meo, chief technology officer at O2.

“This is a huge opportunity for us, as well as a technical challenge. But through our partnership with BT Wholesale, customers of O2 will be backed by a high-performance mobile internet network which we believe will release the potential of 4G services and result in unrivalled mobile phone and internet browsing experiences,” he said.

O2 won a relatively small amount of spectrum in Ofcom’s auction earlier this year – 2 x 10MHz of 800MHz, costing it £550m – but it came with the caveat of a service obligation to provide indoor coverage for 98% of the UK with its 4G services by 2017.

BT was a surprise bidder in the contest and managed to secure 2 x 15MHz of 2.6GHz and 1 x 20MHz of 2.6GHz of its own spectrum, but a spokesperson from the company said it would not be using the extra capacity for this BT deal. However, the spokesperson did confirm BT was looking for a mobile partner to provide mobile services to its customers using the spectrum allocation – as reported in the Financial Times last week.

Currently EE is the only operator in the UK to offer 4G services, but O2, Vodafone and Three plan to roll theirs out across the coming months and go live for customers in the summer.

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