Vodafone and Telefónica ink European network sharing deal

Two of the world's largest mobile operators have signed a joint pan-European network sharing deal that will save both companies millions of euros over the next decade.

Vodafone and Telefónica said that as part of the collaboration, the pair are hoping to provide a better quality of service to their customers by co-operating in related areas such as the provision of transmission services.

The agreement will create a greater network footprint for both firms, and is expected to help reduce the environmental impact of rolling out new sites by consolidating existing masts and antennas and the joint building of new infrastructure.

Further areas of co-operation are actively being explored on a market-by-market basis, such as sharing transmission infrastructure.

The deal spans the UK, Ireland, Spain and Germany. In the UK, Vodafone and Telefónica's O2 will focus on jointly building new sites and consolidating existing 2G and 3G sites. Ireland will see the most comprehensive sharing, where both companies will open all network sites for sharing by the other party.

The two providers already have an existing deal in Spain from 2007 under which 2,200 sites share the use of power, cabinets and masts, and further sites will be added under the new agreement. In Germany, both companies will share existing 2G and 3G sites, and shared masts will be able to be used for microwave backhaul.

Although the two companies will be working closely on these services and rollouts, they will continue to manage traffic independently.

"In a fast changing business climate, operators need to look at different ways to serve customers both now and in the future," said Matthew Key, chief executive of Telefónica Europe.

Key stressed that, even though they will be sharing infrastructure, the two companies will continue to compete strongly against each other in local markets.

Michel Combes, chief executive of Vodafone Europe, said, "Vodafone has led the market in developing effective network sharing business models, and continues to drive the scale and scope of such agreements.

"This move will enable us to focus our resources on developing more innovative and market-leading services, while delivering on our pledge to reduce the environmental impact of our network rollout."

The adoption of mobile broadband and other 3G data services is on the rise and, with the gradual rollout of next generation services over LTE and WiMax, the companies hope that by combining their efforts they can offer their customers better coverage and service, while minimising the cost and environmental impact.