Operators to form infrastructure joint venture, decommission duplicate sites.
Vodafone’s network-sharing strategy gathered further momentum on Friday when it announced its Irish operation will merge its physical infrastructure with that of local rival 3 Ireland.
Much like Vodafone’s deal with O2 in the U.K., and 3UK’s MBNL deal with T-Mobile, the two companies aim to cut costs with the creation of a 50/50 joint venture that will manage their shared cell sites – around 2,000 in total – and transmission networks, but will continue to operate separate core networks and spectrum. Duplicate sites will be decommissioned.
“Around the world, operators are adopting a network-sharing and consolidation strategy that delivers cost efficiencies and rapid network,” said Robert Finnegan, CEO of 3 Ireland, in a statement. “As a result of this agreement we expect to be able to deliver the latest technologies to our customers faster than ever before.”
Vodafone Ireland chief executive Jeroen Hoencamp echoed Finnegan’s sentiments, adding that “at a retail level, we will continue to compete with each other and with other operators as aggressively as before”.
One analyst said the need to lower costs is particularly important in Ireland. “The recession is putting pressure on operators’ revenues, with Vodafone seeing a year-on-year service revenue decline of nearly 1% this year, while retail revenues fell by 2.5% overall during the same period,” highlighted Informa Telecoms & Media research analyst Francesco Radicati, in a research note. “For 3, by contrast, these deals are more a matter of survival, as the company finds it harder and harder to compete from the position of a challenger.”
The joint venture will be headquartered in Dublin and is due to be fully operational by the autumn. Approximately 80 employees from Vodafone Ireland and 3 Ireland will be transferred to the new company.