LONDON Mobile network operators T-Mobile and 3 are to pool their infrastructure for third generation networks in a plan that will mean significant cost savings for both. The alliance between the two previously bitter rivals, currently the fourth and fifth largest operators in the U.K., will also fuel speculation that the companies might eventually merge.
The network sharing plan is seen by some analysts as the pre-cursor of some consolidation in the U.K., which has five mobile network operators, but none with more than a 30 per cent share of subscribers.
The operators claim the deal is the world's largest known active 3G network sharing agreement and will give both carriers an improvement to urban in-building coverage over the next two years.
Two of their main rivals, Vodafone and Orange announced a plan in February to share network infrastructure including sites, masts and some base station equipment.
3, which is owned by Hutchison Whampoa, the Hong Kong conglomerate, claims to have the most comprehensive third-generation mobile network in the country. However, the most recent estimates suggest that its network covers about 90 per cent of the U.K. population. T-Mobile covers about 84 per cent.
Sharing 3G networks should enable the pair to slash the bill for rolling out infrastructure across the uncovered parts of the country. It could also allow the two companies to decommission some existing towers.
Together with the lower future capital expenditure requirement, the combined savings are estimated at £2bn over ten years.
Although masts and the 3G access networks are being combined, each operator's core network will not be shared, and neither will T-Mobile's GSM network. The two operators will retain responsibility for the delivery of services to their respective customers and use their own frequency spectrum.