O2 LTE / 4G strategies in UK and Germany


Telecom Lead @ Mobile World Congress 2013: O2 is betting on 4G / LTE in both U.K. and Germany.

In Germany, O2 will launch new tariffs for its LTE smartphone customers from March 1, 2013. These follow the current pattern for unlimited voice and messaging, showing the increasing importance of data to the mobile proposition, according to Ovum.

In the U.K., O2 has just tied up with Ericsson for LTE-compatible core network and deploying RBS 6000 multi-standard radio base stations for 50 percent of O2’s radio access network.

Steven Hartley, telco strategy analyst, Ovum, said: “O2’s pricing is good value compared with its rivals. However, a direct comparison of O2’s new German tariffs with those of Vodafone is difficult because O2 is selling the handset separately, whereas Vodafone bundles the cost with the plan. However, comparing the total cost of ownership over the life of the two-year contract highlights O2’s competitiveness.”

For example, O2’s Blue XL tariff costs €1,740 over two years, which includes unlimited voice and messaging and 5GB of data per month. In comparison, Vodafone’s Red Premium tariff costs €2,880 for unlimited voice and messaging and 10GB of data per month. O2 may be offering less data, but as the fourth-largest player in the German market it needs to be disruptive and is using pricing as the lever.

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“Interestingly, both plans provide additional SIMs for use in other devices. Ovum believes that the shared data plans, where data allowances can be used across multiple devices, will become an increasingly important model for mobile broadband in the future. While O2’s data allowances are not particularly generous for such an offer, they are at least a start.”

O2, a Telefónica brand serving 23 million mobile subscribers in the U.K., says Ericsson will transform 50 percent of its nationwide network by supplying and deploying the latest RBS 6000 multi-standard radio base stations.

The end result will be a nationwide multi-standard network that supports 2G/3G/4G, giving O2 the ability to manage with data traffic growth and expand its mobile coverage.

Ericsson will become O2’s sole supplier of EPC in the UK and deployment has commenced. This includes Evolved Packet Gateway on the SSR 8000 Smart Services Router family and SGSN-MME on the Ericsson Blade System.

Andrew Conway, head of Mobile Access at O2, said: “This network transformation will put us in a great position for a seamless launch of 4G services this year. The outcome of the recent spectrum auction allows us to ensure the widest and deepest possible reach for new services and will see O2’s 4G network provide indoor coverage to 98 percent of the UK population.”

editor@telecomlead.com