O2 UK strikes 10-year wholesale deal with BT

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Contract will see U.K. incumbent build transmission network, backhaul links for O2’s LTE infrastructure.

BT and O2 UK on Monday signed a 10-year contract that will see the fixed-line incumbent supply transmission and backhaul infrastructure for the latter’s ‘4G’ LTE network.

“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,” said Adrian Di Meo, O2 UK’s chief technology officer, in a statement.

BT said the new transmission network and backhaul links will boost capacity and help with O2’s migration from legacy TDM to Ethernet-based IP services.

“Our network solution will help O2 to deliver a next generation mobile experience to their customers to fully exploit the exciting possibilities of 4G technologies,” said Chet Patel, managing director of BT Wholesale Markets. “We are moving quickly to get O2 up and running,” he added.

“U.K. mobile data traffic is set to grow by more than 400% by 2016,” said Di Meo. “This is a huge opportunity for us, as well as a technical challenge.”

Interestingly, there is no mention of spectrum in the agreement, yet following the U.K.’s 4G spectrum auction earlier this year there was talk of a possible partnership between BT and O2.

BT secured 2×15 MHz of 2.6-GHz spectrum – as well as 20 MHz of unpaired spectrum in the same frequency band – in the auction, while O2 won 2×10 MHz of 800-MHz spectrum, missing out on 2.6 GHz altogether.

Consequently, O2’s LTE network might struggle to keep up with capacity demands in densely-populated areas. A tie-up between BT and O2 that involves leasing some of BT’s paired 2.6-GHz spectrum would fill the gap in O2’s spectrum portfolio.

Following the auction, BT said it would use its newly-acquired frequencies to offer its consumer and business customers a range of mobile broadband services, but CEO Ian Livingston said his company does not intend to build a nationwide mobile network.

Separately, the Financial Times reported last week that BT is on the hunt for a mobile partner to provide services to its retail and enterprise customers, in addition to its employees.

A BT spokesman confirmed to Total Telecom that the telco is indeed looking for a mobile partner, but said it bears no relation to Monday’s announcement.