Telefnica and Vodafone are embarking on a wide-ranging strategic programme to share mobile network assets across selected European operations, in the UK, Ireland, Germany and Spain, with detailed discussions ongoing in the Czech Republic. As part of the collaboration, the two companies are actively exploring opportunities to cooperate in related areas, such as the provision of transmission services.
The two operators will use the agreements to aid the roll out of their respective networks, with the aim of enhancing service quality for customers in the longer term. The agreements will also reduce the environmental impact of both companies roll out activities, due to the consolidation of existing sites and joint build of new sites.
The programme is expected to deliver significant business benefits in the process, including the generation of cost savings amounting to hundreds of millions of pounds for both companies over the next 10 years.
The infrastructure sharing initiatives are broadly expected to enable both companies to offer enhanced quality of service levels within the network footprint to improve customers mobile experience, and to support the delivery of services such as mobile broadband to a greater number of customers across a wider coverage area. Both companies will continue to manage their traffic independently, but will jointly build new sites, where opportunities exist.
In the UK, the companies will focus on the joint build of new sites and consolidation of existing 2G and 3G sites. In Ireland, both companies will open all network sites for sharing by the other party. New build will also be conducted jointly where roll-out plans are aligned. In Germany, the companies will share existing 2G and 3G sites, and shared masts will be considered for use for microwave backhaul. In Spain, the two companies will extend their existing site share agreement, signed in 2007, which includes the shared usage of power, cabinets and mast. To date 2,200 sites are shared under this agreement. During 2009 and 2010, additional sites will be included.
Matthew Key, CEO of Telefnica Europe, says:
In a fast changing business climate, operators need to look at different ways to serve customers both now and in the future. This industry-leading collaboration means that Telefnica and Vodafone will continue to compete strongly against each other in local markets, while giving our customers enhanced mobile coverage in more places, using fewer mast sites. This will also create significant benefits for Telefnica shareholders. We are actively exploring additional areas for cooperation and, by reducing our costs in areas of the business that customers dont see, we can ensure that we invest in areas they truly value.
For Vodafone, Michel Combes, CEO of Vodafone Europe, says:
Vodafone has led the market in developing effective network sharing business models, and continues to drive the scale and scope of such agreements. This is a further example of Vodafones ongoing commitment to deliver the highest levels of service quality for our customers while delivering greater cost efficiencies to the business. 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 roll out.