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."

See also:

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UMTS will cover all of Europe by 2010

The growth of European high-bandwidth universal mobile telephony services will significantly outstrip services planned for the US, says a report from telecoms consultancy Analysys.  15 Dec 2000

3G mobile phone ads could be illegal

Companies that sell advertising space on their third-generation mobile telephone networks could find themselves in breach of European law.  07 Dec 2000

Government probes wireless auction flop

The future of spectrum auctions in the UK is unclear after the government sold only 16 of its 42 available broadband licences, none of which went to rural areas.  30 Nov 2000

Users 'will not pay for high 3G costs'

Mobile phone customers will not bear the brunt of the hefty prices paid for next-generation mobile phone licences, leading industry players have claimed.  12 Oct 2000

Are 3G licences a waste of money?

Network operators are now admitting that third-generation mobile technology is not going to be all it's cracked up to be - and it will cost.  29 Sep 2000

Telcos admit fears over 3G licences

Telecoms operators have admitted that their £68bn investment in third-generation mobile technology could end in "disaster" because services won't live up to the hype.  28 Sep 2000

NTL to build Orange's 3G network

UK mobile operator Orange has taken its first step towards offering consumers next-generation mobile services by choosing cable company NTL to build part of its new network.  31 Jul 2000

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