Vodafone and Three to save €500m from network deal
IRISH mobile phone operators Vodafone and Three Ireland -- the latter owned by Chinese multinational Hutchison Whampoa -- have agreed a 50/50 network-sharing deal, which will save €500m in costs between them.
The deal follows the launch of a similar O2/Eircom network agreement in April last year. The combined Vodafone/Three network is likely to take them to a little more than 2,000 shared site locations, which will match if not surpass O2/Eircom.
The move will increase coverage for customers and will enable a more rapid rollout of new technology for both operators.
The deal will also position them well in the run-up to Ireland's vital spectrum auction in the autumn, which will see mobile providers bidding for forthcoming 4G airwaves.
The combined network will allow both companies to better carry 4G, although each will have to bid separately in the auction.
The strategic partnership sees Three Ireland and Vodafone setting up a third company, which will initially contain 80 employees from both firms.
This as yet unnamed company will manage the resulting shared infrastructural network. The move will eliminate duplication at sites throughout the country and save costs on maintenance and site management.
Three Ireland said the end result for the consumer would be better network access and ultimately, a better ability to take advantage of the improved speeds and efficiency of 4G, which, in turn, would allow users to benefit from better visual streaming services, such as television and films.
"Securing future investment for technologies in a competitive market is critical to maintaining a sustainable business," Jeroen Hoencamp, CEO of Vodafone Ireland, said.
"We believe this partnership will place Vodafone in a stronger position to commit to future investment in our network and the products and services we provide to customers."
Robert Finnegan, CEO of Three Ireland, said operators from around the world were adopting a network-sharing and consolidation strategy that would deliver cost efficiencies and rapid network expansion.
Recently, a similar network share deal took place in Britain between Vodafone and O2 and, previous to that, Three UK concluded a deal with T-Mobile. The latter is estimated to have saved both operators €16bn in costs between them.
The deal will up the ante in Ireland's competitive phone market where profits have generally been falling and jobs have been lost.