SSE’s telecoms business to build Three UK’s 5G network

1 May 2018

A Three store in the UK. Image: Dom J/Shutterstock

Initial deal with SSE will bring 20 of Three’s core data centres ‘on net’ for 5G.

The telecoms subsidiary of SSE plc – the company shortlisted for the National Broadband Plan (NBP) in Ireland as part of a consortium with Enet – has won a vital 5G contract with Three in the UK.

SSE Enterprise Telecoms is aiming to expand Three’s fibre and 5G networks.

‘Our continued investment has made us the go-to network provider to help UK businesses unlock their growth potential’

In the first phase of the partnership, which commenced in April, SSE Enterprise Telecoms has begun facilitating fibre optic connections for Three UK’s 20 core data centres, which form part of its broader network footprint.

The deal is expected to support Three UK’s network transformation, preparing it for an eventual 5G roll-out and helping to deliver an enhanced 4G network experience for consumers.

SSE Enterprise Telecoms operates a 13,700km private telecoms network and 15 data centres across the UK.

SSE plc is considered one of the ‘Big Six’ energy giants in the UK. In Ireland, SSE Airtricity is the second-largest electricity provider, powering 800,000 homes and businesses, mostly with renewable energy.

SSE’s expertise in telecoms is an unknown quantity in the Republic of Ireland, but the company has a role in the vital NBP, which aims to connect 545,000 premises to a minimum of 30Mbps broadband.

Late last year, SSE entered into a joint venture with Enet to bring fibre to regional Ireland as part of a €100m investment.

In Ireland, Three is one of the largest mobile network operators, with its own nationwide 4G network. It acquired the Irish division of O2 in 2014 for more than €850m in a deal that was given the green light by the EU.

A window into the world of next-generation telecoms

In recent weeks, the European Investment Bank approved a €500m financial package for the NBP.

Contracts for the Enet-SSE consortium are envisaged to be signed in September.

And that’s why the deal between SSE Enterprise Telecoms and Three in the UK is fascinating as it could provide a window into SSE’s capabilities in telecoms.

The arrival of SSE into the Irish telecoms industry could be a game-changer as telecoms and electricity networks eventually merge to become smart networks.

An article published in The Telegraph in the UK in June 2017 detailed how SSE is exploring major investments in ultrafast broadband infrastructure in the UK, threatening both BT and Virgin Media.

As part of the deal with Three, the data centre connection contract is part of a multimillion-pound phased agreement that will also see SSE Enterprise Telecoms and Three UK unbundle BT exchanges in the coming years.

Three UK recently reported adding 900,000 new customers in 2017, with its 10m customers averaging 6.8 gigabytes of data usage per month – more than three times the mobile data consumption of the average UK user.

As such, Three UK is investing in its next-generation network to prepare for ever-increasing consumer demands and the future growth of its business, including the roll-out of 5G, as more pressure and demand is placed on existing infrastructure.

“Our continued investment has made us the go-to network provider to help UK businesses unlock their growth potential,” said Colin Sempill, managing director of SSE Enterprise Telecoms.

“As a connectivity provider, we understand how integral network infrastructure is to allow technologies like 5G to reach their vast potential. We’re excited at the opportunity to assist Three UK in its journey to bring unrivalled experiences to its customers while offering new connection options to our own.”

Industry estimates suggest that next-generation 5G mobile services will be available in 2020.

“We are putting our network on the best footing possible to meet the current and future demands of consumers,” said Bryn Jones, CTO at Three UK.

“Our customers use up to 3.5 times more data than the rest of the UK – a demand which is only going to increase as we move towards a 5G world.

“The decision to select SSE Enterprise Telecoms to assist us on this journey was straightforward. Their knowledge and ambitions for UK connectivity were clear and made them the natural choice.”

A Three store in the UK. Image: Dom J/Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years