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July 4, 2012
Mobile operators 3 and Vodafone are set to embark on a network sharing agreement in Ireland. A source close to the deal told Telecoms.com that the two operators are in advanced discussions regarding a joint infrastructure partnership.
The two operators are expected to establish a joint venture with equal holdings that will own and manage the telecoms equipment. Retail services and spectrum holdings will continue to be maintained independently.
The news comes just weeks after Telefónica and Vodafone agreed to extend their existing network sharing deal in the UK to create one single national grid providing 2G, 3G and eventually 4G services. That move was seen as a response to 3UK’s successful network sharing agreement with Everything Everywhere, whose MBNL joint venture has helped the two cut costs and enhance coverage.
Fred Huet, founder and managing partner at Greenwich Consulting, told Telecoms.com that operators are facing pressure on their margins , and are being required to renew investment for 4G networks. With more traffic running on the network and data consumption rates rising sharply, operators need to be more efficient at running their networks.
“This is happening in many countries across Europe; you definitely see operators rationalising their networks, you’ve got deals across Europe selling tower assets in Spain and France, so there’s clearly a trend across Europe,” he said.
Emeka Obiodu, senior telecoms strategy telecoms strategy analyst at Ovum, estimated last month that Vodafone UK’s deal with Telefónica could lead to savings of over £100 million a year.
“Over the three years from now until 2015 when both parties expect to achieve 98 per cent indoor population coverage across 2G and 3G, the combined potential savings would be in excess of £600 million,” he estimated
The proposed deal between 3 and Vodafone in Ireland, meanwhile, could see each business saving in excess of £200m over a five-year period, according to reports.
3 Ireland and Vodafone Ireland declined to comment on the matter.
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