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    Vodafone and Telefonica O2 confirm network sharing


    Operators will share network infrastructure in Germany, Spain, Ireland and the UK

    Telefónica and Vodafone have confirmed, after many rumours and denials, plans to share mobile network assets across four European territories – Germany, Spain, Ireland and the UK. A fifth, the Czech Republic, will follow, although negotiations are continuing.

    In the UK and Ireland, the elements of the network to be shared include: masts, antennas, sites, cabinets and power supply. The network electronics Nodes B (3G), BTS (2G) and the radio network controllers which are linked to the core network are to remain independent. In Germany and Spain, masts and cabinets are shared, along with power supply.

    Telefónica and Vodafone said in a joint statement that they are exploring opportunities to cooperate in related areas such as the provision oftransmission services.
    The programme could deliver significant business benefits in the process, the operators said, 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 expected to enable both companies to
    –        Offer enhanced quality of service levels within the network footprint to improve customers’ mobile experience as well as support the delivery of services such as mobile broadband to a greater number of customers across a wider coverage area
    –        Reduce the environmental impact of the network by lowering the number of sites required by each company
    –        Reduce network operating costs
    –        Continue to manage their traffic independently
    –        Jointly build new sites where opportunities exist
    Matthew Key, CEO of Telefónica Europe, commented:  “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 Telefónica 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 Telefónica shareholders.  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.
    Michel Combes, CEO, 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 is a further example of Vodafone’s 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.”
    The operators said customers would benefit from reduced cost of network builds, as he operators would bea ble to focus resources on new services. There would also be an environmental benefit.
    The collaboration would also enable both companies to enhance service quality within the network footprint at a faster rate than before, and help to deliver services such as mobile broadband to a wider population, the operators said.

    Shared efficiencies

    Where opportunities exist, long-term cost and operational efficiencies will be realised through jointly building new sites and consolidating existing masts and antennas.
    There will be reduced capital and operating expenditure arising from the fewer number of sites required, with significant savings anticipated by both companies over 10 years.
    In addition, further areas of co-operation are actively being explored on a market by market basis, such as sharing of transmission infrastructure, among others.

    Country by country:

    Germany: Both companies to share existing 2G and 3G sites.  Shared masts can also be used for microwave backhaul.
    Ireland: Both companies to open all network sites for sharing by the other party.  New build will also be conducted jointly where roll-out plans are aligned.
    Spain: Both companies to extend existing site share agreement from 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.
    UK: Both companies to focus on joint build of new sites and consolidation of existing 2G and 3G sites.