Vodafone Three, controlled by Vodafone Group PLC (VOD.US), announced it has signed a £2 billion ($2.7 billion) contract with LM Ericsson Telephone (ERIC.US) and Nokia Oyj (NOK.US) to expand the newly formed mobile operator's network coverage across the UK.
In a statement released Monday, Vodafone Three said LM Ericsson Telephone secured the larger portion of the contract, with the Swedish supplier responsible for deploying its Radio Access Network (RAN) across 10,000 sites and upgrading core networks. Nokia Oyj will provide its RAN technology for 7,000 sites.
The £2 billion, eight-year contract provides much-needed revenue opportunities for both Nordic 5G equipment manufacturers amid a sluggish mobile market. In recent years, operators, particularly in Europe, have delayed expensive equipment upgrade programs.
Vodafone Three was formed through a merger between Vodafone Group PLC's UK subsidiary and Hutchison's Three, with an initial commitment to invest £11 billion in network infrastructure construction. The joint venture received regulatory approval last December. The new company, majority-owned by Vodafone Group PLC, has become the UK's largest mobile operator with approximately 28.8 million subscribers.
The deal represents a setback for Samsung Networks, which has struggled to gain significant market share in the network equipment sector. Vodafone Group PLC has been particularly supportive of the Korean supplier and its "Open Radio Access Network" (OpenRAN) technology, which allows operators to mix and match components from different suppliers.
Vodafone Group PLC is conducting a larger-scale tender across the European market and emphasized that Samsung will be a participant in this major European network deployment. A Vodafone Group PLC representative stated: "Vodafone Group PLC has selected multiple strategic partners, including Samsung, LM Ericsson Telephone, and Nokia Oyj, to jointly build future-oriented network infrastructure that will cover 15 countries across Europe and Africa." This includes a "massive" OpenRAN deployment across Europe.