Vodafone (LON: VOD), O2 And Three Join Hands to Tackle Rural Coverage

Summary

  • Vodafone, O2 and Three will join hands and boost service quality in rural areas.
  • The telecom giants are expected to boost 4G coverage in rural areas that have poor connectivity.

The UK telecom giants are expected to boost 4G coverage in rural areas that have poor connectivity and signal. Vodafone (LON: VOD), O2 and Three are expected to join forces and share the telecom infrastructure such as mobile masts to improve connection quality.

The initial sharing of network resources would lead to increased coverage in all UK countries. The connectivity is expected to improve across several sites in Scotland, Wales, and Northern Ireland.

The construction of network infrastructure dedicated to the rural areas would be completed by 2024. The British government agreed to deploy public funds and share the cost of building the network infrastructure with mobile operators to improve connectivity in rural areas. Notably, the estimated cost of the project is around £1 billion.

The internet is the most important need right now, especially during the unprecedented crisis induced by pandemic. The telecom companies have witnessed huge demand in data and voice services as remote working culture, and virtual classrooms have picked up steam.

Although Vodafone, O2 and Three have decided to improve connectivity in the rural areas, they might have lost the first-mover advantage. In 2020, UK’s old workhorse BT Group Plc (LON: BT.A) even slashed its dividend pay-outs to fibre up the rural households of the country. 

                      

(Source - © Kalkine Group 2020)

Also read: China’s telecom shares dive after NYSE announces delisting

Internet service providers have a lot of scope in the UK rural areas. As people are buying homes in far-off locations after the pandemic changed the way people work today, the telecom companies feel there is a lot of untapped market share in rural areas. As a standard practice across the industry, the network infrastructure is usually shared.

The locations where the network infrastructure would be established would be decided based on the number of networks servicing in that area. In the initial stages, the telecom majors would select the location where there is the only network. In the consequent phase, the government shall finance the projects in locations where there is no coverage at all.

Also read: BT and EE Gift Free Mobile Data to Disadvantaged Families

In the wake of the third lockdown, British telecom operators are offering free data packs to vulnerable families and their children until the end of July. This is a good gesture by the British telecom operators given the prevalent situations in the economy.

 

 

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