BT and Deutsche Telekom have said they will share 3G infrastructure costs in Germany and the UK.
Following last week’s decision by the German telecoms regulator, RegTP, to allow mobile operators to share 3G networks, BT and Deutsche Telekom have announced that they will do so in both Germany and the UK. BT says the deal will save it $1.6 billion in capital expenditure, while Deutsche Telekom believes it will save as much as $2.5 billion. They also both expect to save on operating costs.
Datamonitor has estimated the total roll-out costs for all operators in Germany at $76 billion, including $30 billion on infrastructure alone; for the UK, the figures are $51 billion and $16 billion respectively. If other operators also decide to team up, these sums will be radically cut. Given this situation, BT and Deutsche Telekom’s estimated savings may well be plausible.
The move should also provide good PR for the operators. While there is no evidence that mobile base stations pose health risks, a move to reduce the number of new masts will help appease growing public fears – as well as making planning authorities likelier to approve construction.
However, the deal could still face some obstacles. When RegTP made the announcement last week, Deutsche Telekom and Vodafone (which owns D2, Germany’s largest operator) threatened to sue, saying the conditions of their licenses had been changed. Clearly, Deutsche Telekom has now changed its mind. Vodafone, however, will still be highly reluctant to see cooperation as it has little enough debt that it can afford to go it alone. The company doesn’t want its competitive advantage eroded.
But any challenge is unlikely to succeed. According to RegTP, the decision is a clarification rather than a change of terms. It also seems most unlikely that BT and Deutsche Telekom would risk looking foolish by announcing the collaboration without checking first with RegTP and Oftel that it would indeed be allowed.
Most likely, as the EU Competition Commission said last week, this type of collaboration will go ahead – but with regulators watching like hawks for any signs of unfair collusion.
