BT takes steps towards 3G

BT has announced that it will lease space on its UK phone exchange sites to wireless service provider Crown Castle to help build the necessary infrastructure for third-generation (3G) networks.

Crown Castle will lease 4000 sites from BT, investing around $325m over the next two years into developing the exchange sites for the deployment of 3G wireless services.

Under the agreement, Crown Castle, which will develop the sites to set up equipment to receive and transmit signals for high-speed wireless services, will be able to access BT Wholesale's fibre network, enabling it to provide wireless operators with immediate, high-capacity connectivity.

The UK spectrum auction, held in April this year, raised over £22bn, with some operators paying over £5bn to secure a licence. Many analysts and investors voiced concerns that operators will have spent so much on licences that they will not be able to afford the cost of building networks, which could cost a further £5bn to roll out.

According to BT, which arranged a £16bn loan to cover its spending on 3G mobile licences across Europe, the agreement with Crown Castle will help to deliver substantial cost savings for all the mobile and wireless operators in the roll out of their 3G networks.

Paul Reynolds, chief executive at BT Wholesale, said: "Speed to market will be essential for all of the 3G operators, and we will now be ideally positioned to offer our customers a fully integrated, cost-effective solution, including the very best in network connectivity."

BT will lease the 4000 sites for at least 10 years, and said that the agreement is expected to enhance its pre-tax profits by more than £50m a year.

Separately, BT announced plans this week to set up a research and postgraduate centre in Suffolk with University College London (UCL). The venture, which will be situated in Adastral Park, BT's development park, will focus on next-generation networking, broadband wireless and mobile systems and multimedia content.

The new centre, called UCL@Adastral.Park, will be set up by BT's advanced communications group, BTexact. The venture, which hopes to rival US "west coast" facilities, will also look to work with other technology companies in the Cambridge/Ipswich corridor including Marconi, Agilent Technologies and Corning.

Professor Chris Llewellyn-Smith, provost at UCL, said: "The Adastral Park site has a long history of important communications research. By setting up a facility there we can expand our range of research programmes and further satisfy the growing need for very hi-tech training."