Competition watchdog approves Vodafone, Telefonica UK network-sharing plan


Vodafone and Telefonica UK’s plan to merge their respective mobile networks has been approved by the Office of Fair Trading (OFT).

The two mobile operators said late last week that the regulatory green light means they can now begin the process of combining their respective networks to create a 50/50 joint venture, which will go by the name, Cornerstone Telecommunications Infrastructure (CTI).

Using this shared infrastructure, Vodafone and Telefonica aim to provide indoor 2G, 3G and, subject to the outcome of Ofcom’s forthcoming spectrum auction, 4G coverage to 98% of the U.K. population by 2015 – two years ahead of the telco regulator’s 2017 deadline. To achieve this, the companies will divide the country in half, with each one taking responsibility for the design, management and maintenance of radio equipment and local transmission networks in its designated regions.

When Vodafone and Telefonica first announced plans in June to combine their networks, both were keen to stress that competition between the two would be preserved, with each company maintaining responsibility for its own spectrum, core network and services.

“This partnership is about working smarter as an industry, so that we can focus on what really matters to our customers – delivering a superfast network up to two years faster than Ofcom envisages,” said Telefonica UK chief executive Ronan Dunne.

Dunne’s opposite number at Vodafone, Guy Laurence, echoed his sentiments, describing the OFT’s decision as “excellent news” for consumers and businesses.

“We are promising indoor coverage for 98% of the U.K. population across all technologies within three years,” he said. “Our existing customers will benefit on the devices that they have today and we will lay the foundations for the real 4G network they will want tomorrow.”

However, it is worth noting that the U.K.’s demand for 4G is going to be satiated a lot sooner than the ‘tomorrow’ envisioned by either Laurence or Dunne, after newly-rebranded EE in August received Ofcom approval to refarm its 1800-MHz spectrum for LTE. The company subsequently agreed to sell 2×15-MHz chunks of that spectrum to rival 3UK, a move that was in line with conditions imposed by Ofcom when the company was formed by the 2010 merger of Orange and T-Mobile.

EE said it plans to provide LTE coverage to one third of the population in time for Christmas, before bidding in Ofcom’s 4G auction has even begun.