While in the United States wireless competition is all about the power of the network – marketing revolves around who has the most reliability, or has the largest 3G coverage, etc. – signs point to our friends across the pond relying more and more on differentiating through branding and services. Particularly as European carriers combine their networks.
To that point, No. 1 worldwide operator Vodafone plc and the equally global Telefónica this week signed a deal to share mobile infrastructure in the United Kingdom, Ireland, Spain and Germany.
Of course, the agreement will create a greater network footprint for both. But it’s also a cost-effective strategy: They’ll share equipment such as base stations and share opex like power and heating costs, and consolidate their existing masts and antennas. Other shared responsibilities will be determined on a market-by-market basis, including provisioning services and sharing transmission infrastructure.
And, they’ll collaborate in building new infrastructure, sharing the expense.
With the infrastructure no longer a differentiator, the carriers will rely on service management and applications to compete, and the two will continue to manage traffic independently.
"Vodafone has led the market in developing effective network sharing business models, and continues to drive the scale and scope of such agreements,” said Michel Combes, chief executive of Vodafone Europe, in a statement. “This move will enable us to focus our resources on developing more innovative and market-leading services, while delivering on our pledge to reduce the environmental impact of our network rollout."
As for the specifics: In Britain, Vodafone and Telefónica's O2 will consolidate 2G and 3G sites and build out new sites together. In Germany, they’ll also share 2G and 3G sites, use shared masts for microwave backhaul. In Ireland, the two will share all network sites. And this week’s agreement also will add to the 2,200 Spanish sites the two already consolidated under an agreement from 2007.
