Vodafone, Telefonica in networks deal

March 23, 2009
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, LONDON, Mar 23 – British mobile phone giant Vodafone and Spanish peer Telefonica said Monday they would share network infrastructure in four European nations in a deal to save hundreds of millions of pounds.

"Telefonica and Vodafone … today announce a wide-ranging strategic programme to share mobile network assets across selected European operations," the pair said in a joint statement.

The two companies will "share network infrastructure in Germany, Spain, Ireland and the UK, with detailed discussions ongoing in the Czech Republic."

They added: "The programme is expected to deliver significant business benefits in the process, including the generation of cost savings amounting to hundreds of millions of pounds for both companies over the next 10 years."

Under the new agreement, the two groups said they would build new sites together as well as consolidate existing infrastructure.

However, Vodafone and Telefonica will continue to compete against each other, said Matthew Key, chief executive officer of Telefonica Europe.

"In a fast changing business climate, operators need to look at different ways to serve customers both now and in the future," said Key in the statement.

"This industry-leading collaboration means that Telefonica and Vodafone will continue to compete strongly against each other in local markets, while giving our customers enhanced mobile coverage in more places, using fewer mast sites."

A Vodafone spokesman added: "Because it is infrastructure sharing we do not foresee the need to get any regulatory approval.

"We\’re sharing the masts and towers, but the key thing is that we remain competitive on a retail level."

Investors warmed to the news morning trade, sending Vodafone shares 2.13 percent higher to 122.50 pence in London, while Telefonica added 1.28 percent to 14.99 euros in Madrid.

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