Vodafone to boost UK capex by 50% as it prepares for 4G: Financial Times

Vodafone looks set to increase capital expenditure on its UK network by more than 50% this year as it rolls out new 4G networks, according to the UK’s Financial Times.

The operator won spectrum allowing it to deploy the next-generation mobile-phone technology in a government auction in February, spending a total of £802.8m on frequencies in the 800MHz and 2.6GHz spectrum bands, but was recently reported to have delayed the launch of commercial 4G services until the end of the summer from an original target of May or June.

Vodafone looks set to increase capital expenditure on its UK network by more than 50% this year as it rolls out new 4G networks, according to the UK’s Financial Times.

The operator won spectrum allowing it to deploy the next-generation mobile-phone technology in a government auction in February, spending a total of £802.8m on frequencies in the 800MHz and 2.6GHz spectrum bands, but was recently reported to have delayed the launch of commercial 4G services until the end of the summer from an original target of May or June.

The postponement could be linked to the current incompatibility of Apple’s popular iPhone handset with Vodafone’s frequencies – something Apple [Cupertino, CA, USA] is supposedly set to rectify later this year.

The delay will extend the 4G monopoly of EE, a joint venture between Deutsche Telekom (Bonn, Germany) and France Telecom (Paris, France) that launched services in November 2012.

Telefonica-owned O2 (Slough, UK) plans to enter the 4G market in the summer, at the earliest, while Three UK, the country’s smallest network operator, does not intend to switch on its 4G network until the end of the year.

Vittorio Colao, Vodafone’s chief executive, has reportedly said the operator will follow in the footsteps of EE by pricing 4G services at a premium to 3G, which would make competing on network quality of paramount importance.

The capex increase would see spending rise to more than £900 million ($1.37 billion) from about £600 million last year, according to the Financial Times, with the operator aiming to cover 98% of the UK population with its 4G network by 2015.

However, some of the increased investment looks set to go on improvements at Cable & Wireless Worldwide (London, UK), the fixed-line operator Vodafone (Newbury, UK) acquired for £1 billion in mid-2012.

Along with its rivals, Vodafone remains under considerable regulatory and competitive pressure in the UK market, with service revenue falling by 5.2%, to £1.19 billion, in the first quarter of 2013, compared with the same period last year.