The companies will combine their basic network infrastructure to form one national grid of 18,500 sites. Both will continue to run independent spectrum and competing services, with separate intelligent core networks and customer data.
The combination of Deutsche Telekom’s T-Mobile UK and France Telecom’s Orange in 2010, created the UK’s largest mobile operator with high spectrum holdings. Recently Everything Everywhere angered its UK competition, including O2 and Vodafone, by applying to launch 4G LTE services before the UK’s spectrum auction. If the plans are approved, Everything Everywhere will enjoy a significant advantage over competitors, which require spectrum from the auction to launch 4G services.
By collaborating, Telefónica and Vodafone are expected to be able to roll out 4G services far more quickly than if they acted on their own, and achieve 98% national 4G coverage up to two years ahead of a 2017 regulatory deadline.
“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,” said Guy Laurence, CEO of Vodafone UK.
As part of the plans, each operator will still take responsibility for design, management and maintenance of the radio equipment as well as local transmission to each operator's backbone network in one half of the country. Telefónica UK will manage and maintain elements in the east, including Northern Ireland and most of Scotland, while Vodafone will take the west.
In addition a new joint venture company will be created through the consolidation of the network infrastructure. Towers and masts will be transferred to the entity with opportunities for duplicate sites to be decommissioned. As a result it is estimated that there will be a 10% overall reduction in the total number of sites in the UK used by the two operators.
Telefónica UK and Vodafone UK are currently in discussions with UK regulator Ofcom regarding the plans and intend to establish the joint venture and network sharing agreement later this year.
