TPG To Fibre-Up Vodafone – And Resell Voda Services
The moves put a value of at least $1 billion on the partnership and see TPG putting further pressure on Optus.
Vodafone will provide the electronics on the fibre, making the cost independent of traffic volumes. The move will make Vodafone much better positioned to cope with the expected increase in data volumes as more and more customers start using its 4G network.
Vodafone CEO I?aki Berroeta, said the company expects data volumes to double every 18 months.
Importantly, the deal will remove one of Vodafone’s most significant disadvantages compared to Telstra and Optus. As the operators of fixed networks, both have extensive fibre networks that they can use to backhaul their cell sites. Vodafone has had to rely on buying capacity on other fibres or on microwave, which has much lower capacity than fibre.
Said Berroeta: “Dark fibre allows to us to have our own management of transmission and that means much faster speeds and much lower latency. These will all be requirements of 5G networks.”
Vodafone CTO Benoit Hanssen said that, when completed, there will be more than 3000km of fibre connecting about two-thirds of Vodafone’s present cell sites. TPG will continue to own the fibre and its supply agreement with Vodafone is for 15 years.
Mark Rafferty, TPG’s enterprise and wholesale GM, said the deal would give TPG revenue in excess of $900 million over the 15 year term. The company expects to spend $300-$400 million rolling out the network over the next three years.
Separately, TPG will become a mobile virtual network operator (MVNO) on the Vodafone network. TPG chief operating officer Craig Levy said the deal would enable the company to take some aggressive new plans – which are already on its Web site – to the market.
“We are going to be moving our customers onto a real-time prepaid billing system which will allow us to tightly control our whole mobile business and make sure that our customers are not exposed to over-usage and over-charges,” he said.
“We will be inviting our customers to move to this new network and we will give them a bonus offer . We believe so much in the service that we want them to trial it with no commitment and if they are happy with it they can stay with it.”