U.K. hails E.C.'s 3G green light

The E.C. announced Wednesday that the two operators have won preliminary approval for their plan to cooperate on the rollout of 3G infrastructure in both the UK and Germany. This joint initiative--which T-Mobile and mmO2 believe will save them over £3 billion (US$4.68 billion) in rollout costs--could speed up the rollout of 3G services in Europe.

Both T-Mobile and mmO2 own 3G licenses in the UK and in Germany. The deal means that rather than both companies having to spend money rolling out 3G across both countries, they can effectively carve up areas where it makes sense to have just one network. Customers shouldn't lose out, because the two operators will both allow the other's customers onto their network in places where infrastructure sharing is in place.

More infrastructure-sharing deals are expected to be announced in the coming months, as cash-strapped mobile firms try to get 3G off the ground--something the U.K. government would welcome.

"We've been actively encouraging third-generation licence-holders to share 3G infrastructure--our policy has always been in favour of it," a DTI spokesman told ZDNet UK.

Because the T-Mobile/mmO2 deal covers two countries, the European Commission had to rule on whether the move was anti-competitive.

Any future U.K.-only 3G network sharing deal would have to satisfy the U.K.'s Competition Commission, but according to the government such a deal would probably not break competition law. For that to happen, the companies in question would have to be creating a dominant position in the market, which is unlikely as all five U.K. 3G licence-holders have permission to rollout 3G networks across the U.K.

Some analysts have speculated that network sharing deals such the T-Mobile/mmO2 tie-up could tempt the companies who lost out in the 3G auctions to lodge complaints with regulators claiming that license conditions have been changed. The U.K. government does not believe that any such claim would be successful.