Vodafone and O2 to share network infrastructures across Europe
The move, which is the biggest multi-country deal of its kind, is expected to result in millions of euro of savings for both firms.
O2 owner Telefonica and Vodafone will share network sites and transmission masts in Ireland, Germany, Spain and Britain, and are in talks to do the same in the Czech Republic as part of the deal.
A spokeswoman for Vodafone Ireland said: “In Ireland, both Vodafone and O2 already share certain sites so this announcement does not mark a change in strategic direction; rather, this agreement formalises that arrangement and extends it to other markets.”
Site sharing is an obligation for all 3G operators in Ireland.
The two firms said they will continue to compete with each other to dispel regulatory concern, but are looking at ways to cut expenses.
The deal is seen as a more relaxed attitude towards equipment ownership, with the companies sharing masts and power supply, but keeping their own radio equipment and vendors.
“It is a real transformational deal,” said Michel Combes, chief executive of Vodafone Europe.
Telefonica’s sales in its home country of Spain grew more slowly than any of its other major markets last year, while Vodafone cut its outlook twice in 2008, citing challenging conditions in Europe.
“As soon as you realise that your network is not a differentiating asset anymore, you find ways to decrease the cost of maintaining it: sharing it or outsourcing it,” said Michele Campriani, chief executive of telecom software firm, Accanto Systems.
The two firms will present details of the deal to regulators in Ireland and the other countries involved shortly.
Mr Combes said he did not foresee any regulatory issues because it was a passive network-sharing deal, meaning the two will not share active components to process and transmit signals.
“We view this as positive for Vodafone and Telefonica,” said UBS.
The two companies said they were studying cost savings in other related areas.
The deal covers about 64 million Telefonica customers and about 77 million Vodafone customers.
