Vodafone and Orange’s network share talks were rescued from collapse this week – albeit leaving the two operators with a heavily diluted arrangement instead.
It will be particularly frustrating for the two networks as the first call was made through the shared network between rivals 3 and T-Mobile in recent weeks, Mobile can reveal.
Initial plans between Orange and Vodafone which were triumphantly announced in February last year to enter a complete joint venture of their combined network assets has fallen through.
A spokeswoman for Vodafone said: ‘It was a very ambitious and complex plan. It was way too complicated, and we’re all about simplifying things.’
It is believed that the two networks were embroiled in painful negotiations over respective worth of each other’s network assets for several months.
The two operators have a combined 27,000 masts in the UK.
It leaves a watered-down deal in place where the two companies ‘share the sites, but not the transmission’ – i.e. they share the poles that hold the masts, but they will still have to fund their own transmitters. Many operators already share sites, often with more than two operators. Landlords often still charge operators for each mast, even if they are running from the same pole.
The Vodafone spokeswoman claimed the operator would make a 10% saving from its existing network costs as a result of the deal, but it is still a fraction of the projected savings.
The company also claimed they would cut masts by 15% by the end of this year. Orange and Vodafone will now continue to own their networks individually.
Plans were in place to give the two operators a big advantage over rivals by a faster deployment of high-speed networks, and cut costs by millions of pounds.
A spokesperson for Orange said that the two companies will continue to look beyond this 'kick off' stage and toward further network efficiencies: 'Our initial objective has not changed, that being our two companies working together to deliver better mobile coverage for our customers, as well as the associated environmental and business cost benefits that working together in this way brings.'
He added: 'Beyond this initial implentation, we continue to explore future network sharing initiatives, building on our combined strengths to build better future coverage. In particular, we will continue to investigate further opportunities for power, access, transmission and overall network share.'
Vodafone has already out-sourced management of its networks to Ericsson in many of its European territories.
3 and T-Mobile have since entered into their own network share deal, which is understood to be more deeper than Orange and Vodafone’s deal, with the two smallest networks sharing the cost of building HSDPA networks.
3 and T-Mobile only announced their network infrastructure joint venture in December – 10 months after the Vodafone and Orange deal was unveiled.