Vodafone ramps up 4G spending to nearly £1bn

Vodafone is ramping up its 4G spending. Picture: Getty

The group has already outbid its rivals in buying airwaves for the next-generation of internet service, dubbed 4G. In February, it spent more than £800 million in regulator Ofcom’s auction of radio spectrum.

However, it is up against a 4G network already up and running from EE – formerly Everything Everywhere which owns Orange and T-Mobile – as well as thousands of wi-fi hotspots which allow free or low-cost internet access using a smartphone or tablet.

Vodafone, which launched Spain’s first 4G service last week, said today that it was spending the equivalent of more than £2.5m a day this year upgrading its UK network – a year-on-year rise of about 50 per cent. Services are due to start later in the summer.

The additional spending this year will also go on integrating the fixed-line network that it

acquired through the acquisition of Cable & Wireless Worldwide (CWW) last year.

The firm plans to cover 98 per cent of the UK population with next-generation wireless internet, which promises faster downloads, uploads and video streaming, by 2015.

Vodafone UK chief executive Guy Laurence said: “We’re bringing together the best of mobile and fixed communications to help our business customers make their communications work for them. For consumers, it’s another important step towards the arrival of our ultra-fast 4G service later this year.

“We’re investing in vital national infrastructure that can help play an important role in supporting growth in the wider economy.”

The group acquired a 20,500-kilometre (12,740-mile) fibre optic network with its purchase of CWW, and is integrating this with its network of mobile phone masts to speed up and increase coverage.

It claimed the integrated network would help businesses and organisations increase productivity and allow them to work from any location.

EE last year launched its own 4G network after re-using some of its existing spectrum.

The new 4G standard should mean five-to-seven times faster download speeds compared with existing 3G networks, according to Ofcom.

This means that downloading a music album will take about three minutes on a 4G phone, compared with 20 minutes on 3G. However, users will require a 4G-compatible device such as one of the latest Nokia Lumia or Samsung Galaxy handsets.

Last month, Vodafone unveiled a dip in annual profits on the back of a plunge in revenues across southern Europe, and said it would keep a £2.1bn dividend from its US joint venture rather than return it to shareholders.

The group, which has been at the centre of speculation over whether it will sell its 45 per cent stake in Verizon Wireless to its joint venture partner, said underlying pre-tax profits for the year to March fell 3.1 per cent to £13.3bn.

The UK government raised some £2.34bn from its auction of spectrum, less than had been forecast.