Vodafone Group and Telefonica have agreed to share mobile phone networks in four countries, a move in which they expect to save hundreds of millions of dollars over the next decade.
The companies agreed to share facilities in Germany, Spain, Ireland and Britain. Discussions about cooperation in the Czech Republic are continuing, the companies said.
They said the joint building of new sites and the consolidation of existing 2G and 3G mast sites was expected to yield significant cost savings. The companies already have a sharing agreement in Spain.
"We are actively exploring additional areas for cooperation and by reducing our costs in areas of the business that customers don't see, we can ensure that we invest in areas they truly value," said Matthew Key, CEO of Telefonica Europe, said in a statement.
The European Commission said the deal could pose competition concerns. EU spokesman Martin Selmayr told the Associated Press that current rules allow national regulators to encourage the sharing of facilities as long as it complies with competition rules.
On the heels of the announcement from Vodafone, Ovum released a comment on the idea of network sharing. The report noted that in developed countries, “3G coverage requirements … are among the main drivers for the adoption of network sharing.” The analysis went on to say that on the 2G front, where coverage rates are at 99 percent, cost savings are the main drivers for network sharing.
Ovum noted that many regulators are encouraging network sharing because of its positive impact on the environment, but also on the potential to roll out 3G in rural areas more quickly.