3 and T-Mobile expect to slice £2bn off their combined costs over the next 10 years after agreeing to share the cost of building 3G and HSDPA networks.
The two companies expect to have 98% of the UK population on HSDPA networks by 2009 in what will be the most extensive in Europe.
It puts both companies in pole position to usher in an era of cheap mobile broadband, with both companies expecting to pass on their savings to consumers.
A spokesman for T-Mobile said: ‘The likelihood is that, yes, it will result in even better value for consumers. We will be able to bring out more and better services faster and cheaper.’
The two companies expect to do away with 5,000 masts as part of the deal.
It follows a similar network share agreement between Vodafone and Orange that was signed earlier in the year, but has failed to pick up momentum as both sides have negotiated over the value of their relative assets.
In contrast, T-Mobile and 3 have agreed on all aspects of the deal after a Memorandum of Understanding was made in the summer. The network share plan will commence from 1 January when the two networks will start being stitched together. 3 has the broadest 3G coverage in the UK, followed by T-Mobile.
It has also put O2 as the lone outsider in network share alliances, and the operator with the weakest 3G network as the hype around mobile broadband looks to be becoming a reality.
T-Mobile and 3’s partnership has apparently been cleared by regulator Ofcom, as it is believed to be satisfied the two companies will simply share infrastructure and bring mobile broadband to the market much quicker and more efficiently.
Both parties have been competing toe-to-toe in the mobile broadband market with 3 undercutting T-Mobile when it launched its USB modems for laptops, and T-Mobile following up with a hefty price cut.
Both companies appear keen to rubbish speculation that the network share arrangement is a prelude to a potential acquisition of 3 by T-Mobile. One source said: ‘All this does is increase the value of 3, so it’s nonsensical if an acquisition was being planned.’