O2 and Vodafone have anounced plans to set up a network sharing joint venture that would see the companies operating and managing a single network grid in the UK.
The companies are hoping to get approval from Ofcom and set up the network sharing arrangement later this year. The operators said both businesses will continue to actively compete with one another in all products and services. They will also have complete control over wireless spectrum, intelligent core networks and customer data.
If approved by Ofcom, they said the joint venture would be able to deliver 2G and 3G services, both indoor and outdoor, to 98% of the UK population by 2015. They added that the partnership will be able to deliver two competing 4G networks faster than they could independently, and up to two years quicker than Ofcom's target to have 98% of the population covered by 2017.
Both companies will share a single grid of 18,500 masts, which amounts to a 40% increase in sites for either operator. The joint venture would commission duplicate sites and the operators expect there to be a reduction of more than 10% of the overall number. The joint venture will also have responsibility for building new sites to extend coverage into rural and remote areas.
Over time, Vodafone will take responsibility for designing, managing and maintaining radio equipment and local transmission in the west of the UK, including Wales, while O2 will have the same responsibility for the east, including Northern Ireland.
Both operators said they will contine to be responsible for their own existing spectrum holdings and will act independently in the forthcoming 4G auction. Each operator will carry its traffic on its own spectrum holding.
Telefónica UK CEO Ronan Dunne said: 'Exceptional customer demand for the mobile internet has challenged the mobile industry to consider innovative solutions to building a nationwide network that will be fit for our customers in the future and support the products and services that will truly make Britain digital. This partnership is about working smarter as an industry, so that we can focus on what really matters to our customers – delivering a superfast network up to two years faster than Ofcom envisages and to as many people as possible. One physical grid, running independent networks, will mean greater efficiency, fewer site builds, broader coverage and, crucially, investment in innovation and better competition for the customer.'
Vodafone UK CEO Guy Laurence said: 'This partnership will close the digital divide for millions of people across the country and power the next phase of the smartphone revolution. It will create two stronger players who will compete with each other and with other operators to bring the benefits of mobile internet services to consumers and businesses across the country. We have learned a lot from our existing network collaboration but now it is time for it to evolve. This partnership will improve the service that customers receive today and give Britain the 4G networks that it will need tomorrow.'
The two operators already operate another network sharing scheme called Cornerstone, which shares assets across Europe.
Editor: Graeme Neill