Vodafone and O2 to pool mobile networks

bealtine · 23-03-2009 11:31am #1

http://www.guardian.co.uk/business/2009/mar/23/o2-vodafone-mobile-networks

Vodafone and O2 to pool mobile networks

The network sharing agreement is the biggest shakeup of the UK's mobile phone industry since the introduction of wireless broadband services at the start of the decade

* Julia Kollewe
* guardian.co.uk, Monday 23 March 2009 09.31 GMT
* Article history

Vodafone has teamed up with Telefónica, the owner of O2, to pool mobile networks - and frozen the pay of its 10,000 UK staff in a further bid to slash costs.

The two mobile phone companies today announced a "milestone" collaboration to share network infrastructure in the UK, Germany, Spain and Ireland, with discussions still ongoing in the Czech Republic.

The network sharing agreement, first predicted in the Guardian a fortnight ago, is the biggest shakeup of the UK's mobile phone industry since the introduction of wireless broadband services at the start of the decade.

The deal is expected to deliver cost savings of hundreds of millions of pounds for each company over the next decade - which should lead to cheaper calls and internet services for customers. The firms are exploring further savings in related areas.

The joint building of new sites and pooling of existing 2G and 3G masts and equipment will lead to a "significant" reduction in the total number of masts, reducing environmental impact, the companies said. A Vodafone spokesman said "several thousand" base stations will be shared, resulting in less power being used, as well as accelerating mobile broadband coverage. In some parts of Wales and Scotland, neither operator provides any mobile phone coverage at all. A planning team from both companies will work out which sites will be pooled.

Vodafone also confirmed that it is freezing the salaries of its 10,000 staff in the UK, including management, in the coming year. A decision on bonus payments has not been made yet but "bonuses are unlikely", a spokeswoman said.

The news comes less than a month after Vodafone announced it was cutting 500 jobs in Britain as part of plans to save £1bn worldwide by 2011.

Guy Laurence, the chief executive of the firm's UK business, wrote in a memo to staff: "If we had agreed to a salary rise it would have forced us to increase the number of redundancies in the recent announcement."

As part of the cost-cutting drive, company car drivers are being asked to keep their cars for four years rather than three, or do extra miles (80,000 instead of 60,000), before getting a replacement

seamus · 23-03-2009 11:46am

Hah, that's mad, I was just thinking about this last week.

Basically we're at a point now where coverage is almost ubiquitous (or expected to be), so coverage is no longer a competitive edge for mobile companies. So why not consolidate it into a single infrastructure instead of the expense of running two networks.

I imagine they'll hand over planning and management to a third-party (Nokia or Ericsson perhaps) and share all costs, with the aim of actually removing a shedload of masts - there are three transmitters near me serving the three operators when in reality one would be sufficient.

Hopefully three will jump in bed with this which means that the cost of new masts is effectively cut by 70% which should mean that more remote areas will get rolled out quicker and overall upgrades will be more forthcoming.