O2 Refresh is a 24 month tariff that separates the cost of the handset from the cost of voice, SMS and data services.

The UK arm of Spanish operator Telefónica O2, has introduced a tariff that allows customers to buy a new handset while tied in to a contract, without having to pay additional costs.

O2 Refresh is a 24 month tariff that separates the cost of the handset from the cost of voice, SMS and data services. When choosing to upgrade their handsets, rather than having to pay off the remainder of their contract, customers pay the remaining balance for the phone alone, and then restart their contract factoring in the cost of the new device. If they keep the old device, they move onto a reduced service only contract.

Under the terms of the tariff, customers choose a phone plan and a separate airtime plan and paying separately for each. This results in the customer paying the same overall as they would on a standard 24 month pay monthly tariff, according to O2.

Customers who want a new handset before their contract expires can opt to pay off the remainder of their phone plan, and end their Airtime Plan with no termination fee.

“Mobile phone technology continues to advance at a rapid pace, yet the way phones are sold has remained largely static,” said Feilim Mackle, sales and service director at Telefónica UK.

“Increasingly our customers are telling us that they don’t want to be tied to the same phone for two years and, with 4G coming to O2 this summer, we want to make it easier for our customers to benefit from the latest technology.”

Sky now becomes the UK's second largest broadband provider

UK satellite broadcaster BSkyB has agreed to purchase Telefónica UK’s consumer broadband and fixed-line telephony assets for £180m ($270m), making it the second-largest provider in the UK broadband market.

The deal covers Telefónica UK’s O2 and BE brands, which together serve around 560,000 broadband and 377,000 fixed telephony customers, according to the telco’s 2012 results, announced yesterday.

These customers will join BSkyB’s 4.2 million existing broadband subs, and will be migrated onto Sky’s fully unbundled network, supported by a nationwide all-fibre core, which reaches 84 per cent of all UK homes.

The acquisition is expected to close by the end of April 2013, and will make Sky the second-largest broadband provider in the UK, behind dominant telco BT which has over six million retail broadband subs.

Commenting on the acquisition, Emeka Obiodu, telco strategy analyst at Ovum, said that the acquisition is significant on several fronts.

“Firstly, it makes BSkyB the second largest broadband provider in the UK. This strengthens the hand of BSkyB in the market as the company would now be able to boast of having a bigger TV customer base, and more broadband customers than its main rival – Virgin Media.

“Secondly, the battle for pay-TV and broadband supremacy in the UK has now intensified strongly. BT, the largest broadband provider, has spent heavily to win TV rights, and earlier this week, took over ESPN’s UK and Ireland TV channels.

Obiodu added that as the UK’s largest pay-TV provider, BSkyB has now moved swiftly to become the second largest broadband provider. Such a consolidation will convert the UK’s pay-TV and broadband markets into a three-way fight between BT, Sky and Virgin Media, he said, adding that it doesn’t have to be bad for consumers, but some may not like it.

“Thirdly, for those who don’t like the consolidation of the market to three main pay-TV and broadband providers, this is the inevitable consequence of technology changes and intense competition. Local loop unbundling has largely run its course and any broadband provider that wants to remain relevant in the future will need to outline a path to fibre.

But that costs money, Obiodu warned, and with retail prices so low, and the return on investment tough to earn, pure-play broadband providers will struggle to survive. The market is now left with players that are able to spread the cost of fibre across more services, he said.

“Fourthly, for O2, this is significant as it now puts its hopes for a broadband future on LTE, combined with Wi-Fi. In the recent auction it won spectrum in the 800 MHz band, which will be good for providing coverage, albeit with limited capacity. But it is interesting that it didn’t get spectrum in the 2.6GHz band, which would have been good for high capacity broadband over shorter distances,” said Obiodu.

“Fifthly, this sale reduces the power of UK mobile operators in the converged space,” concludes Obiodu. ”At a time when telcos across Europe are intensifying efforts to offer converged (fixed, mobile, broadband, TV) services, mobile telcos in the UK are making themselves much more reliant on mobile.”

With Latin America now accounting for over half of Telefónica’s overall revenues, the Spanish telecoms giant appears to have decided to focus its efforts on other broadband and TV markets than the UK, and shore up its languishing Spanish IPTV service.

O2 has selected NSN to prepare its network for LTE services across London and the South East of England

UK operator O2, part of the Telefónica group, has selected Nokia Siemens Networks (NSN) to prepare its network to deliver LTE services across London and the South East of England. The operator is preparing to launch its 4G services soon after the UK’s spectrum auction in early 2013.

The decision was made after a successful 12 month LTE network trial involving hundreds of consumers and businesses across parts of London, according to NSN.  O2 will also rely on NSN to upgrade its existing GSM and HSPA network with the vendor’s latest radio access technology, and it is also enabling O2’s radio access network sharing.

“We’re investing in our network now to ensure we’re able to make 4G available to our customers as soon as possible following next year’s spectrum auctions,” said Andrew Conway, head of mobile access for O2. “Our choice of vendor was based on the positive experiences we’ve had implementing Nokia Siemens Networks’ Liquid Radio solution in our network.”

Rob Stent, head of the Telefónica UK customer team at NSN, added that the vendor is helping O2 meet its goals related to network simplification and managing consumer expectations for capacity.

Ten UK CSPs have signed up to a net neutrality code of practice

UK fixed and mobile operators are divided over whether to sign up to a voluntary code of practice in support of net neutrality. While ten service providers have signed up, Vodafone, Everything Everywhere and Virgin Media have so far refused. 

Signatories to the code have committed to providing a “full and open” internet service to customers and to not using traffic management practices to target or degrade the services of a competitor. They have also agreed not to market a subscription package as including “internet access” if certain kinds of legal content or services are barred. 

The code has been devised by the Broadband Stakeholder Group (BSG); the UK Government’s advisory group on broadband, and builds on the transparency code of practice published in 2011. 

Vodafone said that it refused to sign up because of the way the code has been worded. The operator signed up to last year’s code, but said it is concerned that the language would have resulted in it having to give a very confusing message to customers. 

“Unfortunately, we have been unable to sign up to the new code because the language chosen by the signatories is impractical and does not reflect the services enjoyed by millions of mobile phone users every day,” the operator said in a statement. 

“Under the code we would have been unable to use the phrase “internet access” to describe many of the services enjoyed by customers.” 

Meanwhile, Everything Everywhere, which also signed up to the BSG’s code of practice last year, stated that it is too early to know how a code of this type will affect customers’ internet experience, as the market and content delivery models are still evolving. 

“That said, we support the principle of the open internet and believe transparency is the way to achieve this,” a spokesperson said. 

Virgin Media chief executive Neil Berkett has in the past been openly dismissive of the concept of net neutrality and said that anyone who didn’t pay Virgin a premium would have their content stuck in the slower internet “bus lane”. However, the official line given to Telecoms.com this week was that the firm has “no intention of discriminating or treating data differently on the basis of who owns or publishes”, but will not be signing up to the code as it stands. 

“We had tried to encourage something that would be clearer for industry and give consumers improved transparency. However, these principles remain open to misinterpretation and potential exploitation,” Virgin Media said in a statement. “We will be seeking greater certainty before we consider signing.”

3UK, O2, BT, Giffgaff, Tesco Mobile and TalkTalk are among those who have signed up to the code of practice. 

Matthew Howett, lead analyst, regulatory telecoms at Ovum said that the new code recognises the importance of managed services and provides a fair degree of flexibility to allow these to develop. 

“It’s generally recognised by both sides – ISPs and over the top players – that it’s necessary to build and maintain a sustainable internet model. It remains an area of constant evolution and it is reassuring that self-regulatory measures such as these are being explored rather than a heavy-handed and possibly premature intervention from the regulator.  

However, he added that the issue of how “full internet access” is marketed is less clear at this stage. 

“With no commonly used term to describe internet access with restrictions, which is a fairly common practice, some more clarity form the BSG would be useful. Ultimately it will be down to consumers to choose the type of package that meets their particular needs and healthy competition between providers is likely to ensure that a range of such packages continue to exist,” Howett said.

Ofcom has said that a fourth wholesale operator will be guaranteed LTE spectrum if the reserve price is met

UK regulator Ofcom has unveiled plans for the country’s 4G spectrum auction. The UK has lagged other leading markets and Ofcom has revealed that spectrum will be allocated in 2013.

Ofcom has set aside spectrum intended to guarantee the presence of four LTE operators in the UK market, insisting that UK consumers would benefit from better services and lower prices if there continues to be “at least four credible wholesale operators of mobile services”.

The fourth operator is likely to be 3UK, although Ofcom said it would guarantee the spectrum to any operator prepared to meet the reserve price should 3 not be interested.

The auction will offer spectrum in the 800MHz, 1800MHz and 2.6GHz bands and Ofcom said that competition would suffer if neither 3UK nor a new entrant is able to acquire at least a minimum amount of spectrum in the auction.

Limits will be imposed on the amount of spectrum each operator can acquire in order to ensure that no operator has substantially more spectrum than the others.

UK operators will be able to bid for 4G spectrum in early 2013. They are expected to start rolling out 4G networks using the auctioned spectrum from the middle of 2013, and begin offering 4G services to consumers later that year. Ofcom insists that this is the same timeline that it has set out in the past and said that it is still on course for meeting that target.

The lower frequency 800 MHz band is part of the ‘digital dividend’, which is ideal for widespread mobile coverage. The higher frequency 2.6 GHz band is more suited to delivering higher capacity, but lacks in-building penetration. These two bands add up to 250 MHz of additional mobile spectrum, compared to 333 MHz in use today.

Everything Everywhere has been campaigning for approval to refarm its existing 1800MHz spectrum in order to launch LTE services ahead of the auction. Ofcom said that this is a separate matter and no decision on Everything Everywhere’s plans has been made yet.

“Europe’s telecoms markets are already dividing into two camps of 4G “haves” and “have-nots” and the UK lies firmly stuck in the latter,” said Thomas Wehmeier, principal analyst for telco strategy at Informa Telecoms & Media. “The auction proposal set out today by Ofcom means that the UK will not see 4G LTE services go live until later in 2013 at the earliest, putting UK mobile consumers almost four years behind the world’s leading 4G markets.”

Meanwhile, Simon Collins, Vice President at Praesidium, the business consulting division of WeDo Technologies, blamed gamesmanship by the UK’s operators for stalling the auction process.

“I think it’s sad that it’s the play-off between the network operators in the UK that has delayed LTE being implemented,” he said. He added that Ofcom should have released certain spectrum to enable more operators to pilot LTE networks.

“There are always radio spectrum issues that you hear from regulators in other markets, but at the end of the day, if the network operators are at least given some release of spectrum they could at least start pilots because at the moment there are none, and in other markets operators have been able to pilot LTE services much earlier.”

However, Wehmeier added that being late to market with 4G is not necessarily all bad news.

“UK mobile operators and consumers alike will benefit from the fact that 4G in late 2013 will be a more mature technology, providing major benefits in the shape of a more stable technology, a greater range of devices and significantly lower equipment costs due to increasing economies of scale,” he said.

Telefonica is bringing small cell open wifi networks to London in time for the Olympics

Mobile operator O2 UK has revealed that it expects to run out of spectrum on its macro cell layer around 2014. Speaking at a round table briefing hosted by the Small Cells Forum, Telefonica UK’s chief radio engineer Robert Joyce said that, “As we see it, with the increasing demand from tablets and smartphones the macro cell will not be able to cope. We can take the macro cell grid to eight times its current capacity and then we’ll run out of spectrum.”

Joyce said that this would occur even taking into account the spectrum acquisitions it hopes to gain from the digital dividend auction in 2013.

To deal with this spectrum crunch Joyce said that, along with spectrum acquisition, refarming 2G to 3G, and moving to LTE, small cells would be the answer. “At this point we will have to break the grid. We will to talk about small cells – not just femtocells but wall-mounted, telegraph pole small cells.”

Joyce went on to say that any issues operators were likely to face around small cell deployment were not technological but practical. “The key to small cells is not so much the technology, as we’ve found in London, it’s more what structures are available and what deals you can do getting planning permission. The councils want free wifi, but push you to their planners when you try and put free wifi on the lamp posts.”

Joyce revealed that to support the demand for data during the Olympics O2 has, in partnership with Ruckus Wireless, launched a number of open small cell powered wifi networks in London. Joyce said in testing last week on Exhibition Road, he was able to achieve a download speed of 83Mbps, albeit on an unloaded cell.

Detailing the work that went into the backhaul network Joyce said, “We’ve had to use various transmission techniques in London to get the network deployed in time for the Olympics. We’ve got a mix of 28GHz point-to-point from Cambridge Broadband Networks. We’ve got 5Gig unlicensed links down to the street canyons and we’ve actually got a full mesh throughout all the lampposts in central London along with BT fibre – a real attack of transmission techniques.”

Joyce said that O2 were also looking at supplying xDSL to rural areas via telegraph poles and looked at powering small cells via solar power for areas where using conventional power techniques were restrictive.

The Small Cells Global Congress is taking place on 30-31 October 2012, in the Hotel Palace, Berlin, Germany. Click here to register your interest.

The UK is behind the curve with LTE deployment

The UK Government’s decision not to facilitate the deployment of LTE until 2013 at the earliest is “appalling” and has forced the UK to surrender its position as one of the leading communication markets in the world. This is the judgement of a C-level executive from one of the UK network operators, who asked not to be named.

His comments were made on Wednesday this week, shortly before the UK’s Minister for Culture, Ed Vaizey, said at a conference in London that Ofcom is being held up in its approach to LTE licensing by fear of litigation from the UK operator community.

A number of UK tech sites, including Tech Radar and The Enquirer, reported Vaizey’s comments at the Future Entertainment Summit in London this week.

“Ofcom needs to go through a massive process [with LTE] as it will get sued by telcos if it doesn’t get it right,” Vaizey said. ”So, if you are looking at what is delaying it, it is not Ofcom it is the telecomm companies.”

But a senior mobile operator executive told Telecoms.com this week that the UK Government has “lost the plot and let us fall behind.” He continued:

“We led the world with mobile, and we led with the deployment of PCN (GSM1800MHz) networks. We were also at the forefront with 3G, and the Government did very well out of that. It’s appalling that, with LTE, they have let us get behind in the world of global communications.”

He went onto argue that UK operators’ deployment strategies for LTE cannot be addressed until the nature of the licences become clear. With the UK now split into two network camps—Vodafone and O2 want to deploy LTE in collaboration while 3UK and Everything Everywhere are expected to rollout the technology through their MBNL network joint venture—collaboration will be an essential part of the deployment process. “But collaboration is likely to be restricted by certain clauses in the spectrum licences,” he said. “Until it becomes clear how much this is likely to happen, it’s very difficult for us to plan.”

All UK networks face a fate similar to that endured by O2 in 2009 when data traffic led by the popularity of the iPhone caused huge strain, forcing CEO Ronan Dunne to apologise for poor network performance, the executive told Telecoms.com.

“We will run out of spectrum and sites and we won’t be able to carry the traffic growth,” he said.

Everything Everywhere, which operates the Orange and T-Mobile brands in the UK, is seeking permission to re-farm some of its 1800MHz spectrum in a bid to launch LTE ahead of the allocation of 800MHz and 2.6GHz through auction—which is currently expected to take place next year.

But Vodafone and O2 have voiced concerns over the proposal, arguing that it would give Everything Everywhere an unfair advantage. Ofcom is currently considering its response to the EE request. Vodafone and O2, meanwhile, were allowed to re-farm 900MHz spectrum for 3G services in 2011.

An Ofcom spokesman told Telecoms.com that it has “done everything possible to ensure the early release of [LTE] spectrum” but added that it has faced “delays caused by legal challenges and the threats of legal challenges.”

The auction of LTE spectrum is still scheduled for the end of 2012, although much of the spectrum allocated will not be clear until 2013 —and in some cases late in 2013.

Ofcom’s statement on LTE licensing is expected in late summer and it is highly unlikely that the UK regulator will deliver its pronouncement on the Everything Everywhere proposal until after that statement as been made.

Not everyone believes that coming late to the LTE party will harm the UK market, however. Ed Candy, group technology strategist for Hutchison’s 3 group, recently told Telecoms.com that the device ecosystem is still too immature to enable operators to really exploit LTE network investments.

O2 is now offering tablet insurance through its O2 Money unit

In a play to further establish a standalone payment brand independent from its mobile network, O2 is offering insurance cover for tablets to UK users across all mobile networks via its O2 Money unit.

O2 said that while the O2 Money unit is separate from its core mobile network offering, the firm is still hoping to leverage the reputation of a trusted and reliable service provider it has cultivated through its mobile brand.

The operator is offering cover for Apple’s iPad products and Samsung Galaxy tablets only at first, but said that this will be extended to a wider range soon.

O2 Money is offering the tablet insurance in two tiers: stolen or damaged tablet cover, which will cost customers £10 a month, and additional cover for lost, stolen or damaged products, which will cost £15 a month. Interested customers should apply for cover before their tablet is 90 days old.

The insurance service is being launched through O2 Money, the same unit that has launched O2’s mobile wallet offering, its O2 money account card, mobile insurance and travel insurance, which are also available to customers from all networks.

The wallet will ultimately act as a container for multiple payment technologies

Financial services firm Visa Europe has said it will launch the V.me digital wallet on a controlled basis in the UK, France and Spain in the autumn of 2012.

The service will be made available through Visa’s member banks and will initially be accessed through the web browser on a PC, laptop, tablet or smartphone. The wallet will ultimately act as a container for multiple payment technologies, including virtual credit cards. Consumers will be able to put multiple cards into the wallet as well as technologies to make payments face-to-face, online or in a mobile environment.

Payments processor WorldPay has also been signed up as a key development partner in the delivery of the V.me service in the UK, to provide commercial and propositional insights to meet retailer needs and expectations.

Mariano Dima, executive VP of product and marketing solutions at Visa Europe, said: “V.me sits at the heart of Visa’s future of payments. For the first time, consumers and retailers will have a streamlined online checkout experience through an acceptance mark that offers industry-leading security and, when a Visa card is used in a V.me wallet, the same protection and rights that come with any Visa card transaction.

E-commerce currently represents 22 per cent of Visa Europe’s transactions and grew 44 per cent between 2009 and 2011.

Telecoms.com recently interviewed Visa’s global head of mobile, Bill Gajda, who spoke about how the mobile industry is looking to use the existing global, scalable, interoperable, secure rails that Visa, Mastercard and a few other companies supply, to extend the reach of mobile financial services.

Last week UK operator O2 launched its own mobile wallet offering.

Currently, it looks more like it’s trying to compete with the Pingit mobile money transfer service that UK bank Barclays launched in February. O2 Wallet is also an evolution of the O2 Money prepaid card launched in 2009 – which is now incorporated into the new service.

Will O2 Wallet be successful? It has a greater chance of success than mobile payment services solely focused on NFC. But O2 faces the same challenges that all other telcos face when competing against so-called over-the-top players – global online companies such as PayPal and Google that have greater geographic reach, brand appeal and agility.

O2 is part of an alliance with other UK operators – Vodafone and Everything Everywhere (Orange and T-Mobile) – to set up a joint m-commerce offering in the UK, to more effectively compete against OTT players. But the alliance has already ran into regulatory resistance, highlighting the difficulties that telcos face in trying to band together without appearing to be anti-competitive.