O2 plugs 5G but will it be more false promises?

O2 might be lagging behind when it comes to 4G performance, but its hoping to get ahead of the pack with the launch of a 5G test bed at The O2 in North Greenwich later this year.

Earlier this week RootMetrics condemned O2’s performance over the UK, ranking it as the worst of the four major players in the UK, but with 5G revolution just around the corner there is an opportunity to wipe the slate clean and wow customers. The launch of the 5G test bed will aim to put the technology in ‘the hands of the British public’ using the popular music and sports venue as a showroom to boast about 5G capabilities.

“The arrival of 5G technology, and the range of unprecedented benefits it will bring, will play a key role in keeping our society and the British economy moving for years to come,” said Mark Evans, CEO of O2.

“That’s why we are delighted to announce our plans to launch a 5G test bed at The O2 later this year. At O2, we are obsessive about always delivering for our customers, and this test bed is a further example of our pioneering attitude to putting our customers first and backing the importance of mobile for Britain’s future.”

Should the team be able to nail the 5G experience at the O2, it could prove to be a very good move. The O2 is one of the country’s most popular entertainment venues hosting a variety of events including the ATP World Tour Finals in tennis, Def Leppard and Professor Noel Fitzpatrick, ‘The Supervet’. Considering the number of visitors the venue brings in each year, it could work as a very effective shop window for the brand.

The test bed will be delivered using Multi-access Edge Computing (MEC) technology, a term which is set to become very prominent over the next 12 months, configured for virtualisation of core 5G network technologies. The venue will partly be used to stress test new technologies, but also usecases ahead of a wider scale launch over the coming years.

O2 might be looking to give a better showing in the 5G world than it is currently doing in the 4G one, but that doesn’t seem to be having a massive negative impact on the business overall in the UK. Over the last 12 months, the business collected total revenues of £5.728 billion, a year-on-year increase of 2.2%, with mobile service revenues up 1% and net customer additional standing at 174,000. The number of net additions increases to 266,000 when you add in M2M.

Perhaps a reason for the poor network performance is the traffic. Aside from having 25 million customers, 12.9 million of which are using 4G, O2 also has MVNO deals with Tesco Mobile, Sky Mobile and Lycamobile. In total, 32.2 million people are using the network, with the team claiming it is the biggest UK mobile network carrier. But in all fairness to O2, it is spending money on the network to improve the performance.

Over the final quarter, £198 million was spent on improving performance and coverage, while the total across the year was £724 million. Over the final quarter of the year, EE spent £122 million by comparison. That said, Orange spent €7.209 billion. Admittedly, Orange is in a broader number of markets (fixed, wireless etc.) and regions, but as a percentage, CAPEX takes 12.6% of total revenues at O2 in the UK while it stands at 17.5% across the Orange group. Orange is looking like one of the strongest telcos in Europe because it is doing more to future-proof its network, the CAPEX numbers demonstrate this very effectively.

These quarterly results suggest O2 is in a decent position to tackle the 5G euphoria, but let’s not get too carried away. Telcos are generally still acting too conservatively when it comes to network investment. The 5G riches will be reserved for the bold and as D-Day approaches some telcos are starting to look like startled deer.

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