Vodafone and Three confirm deal to share network infrastructure

13 Jul 2012

Vodafone and Three have entered a deal that will see them form a new 50/50 joint venture whereby they will pool their physical network and site infrastructure at more than 2,000 locations across Ireland.

As Siliconrepublic.com reported recently, the two companies will continue to run the ‘intelligent’ elements of the network separately, including their core network capabilities and service platforms, as well as manage their own radio equipment and spectrum independently.  

The new company is expected to be fully operational from the autumn and will be headquartered in Dublin.

The managing director will be appointed from an independent pool of talent and the new company will have its own management board. About 80 employees will transfer from Vodafone Ireland and Three Ireland to the new joint venture company after a consultation period. 

These will include employees that currently work in the radio and transmission teams, the Network Operations Centre, and some support roles.  

Rapid rollout of next-generation network

The companies said this strategic partnership is the first of its kind in Ireland whereby the joint venture company will manage the rapid rollout of a consolidated portfolio of shared network sites and infrastructure, as well as the maintenance and ongoing operational service and associated equipment. 

The deal between Vodafone and Three echoes a recent deal between Vodafone and Telefónica (owner of O2) to build a nationwide 4G network in the UK that will cut the costs of deployment by 25pc.

Both companies will also benefit from increased purchasing leverage, an increased fibre footprint and the opportunity to expand mobile network coverage for customers.

Consolidation of network sites and the transmission infrastructure of competing telecommunications companies is under way industry-wide, across many markets. 

Under this agreement, duplicate sites will be decommissioned, and each company will have access to the other’s sites. 

Both companies will continue to remain independently responsible for what technology and spectrum is deployed on a site-by-site basis and what standard of service customers experience. Each operator retains the flexibility to invest in dedicated sites and equally to choose the pace and degree of new technology deployment according to the level of service each company plans to deliver.  

“Securing future investment for technologies in a competitive market is critical to maintaining a sustainable business,” Jeroen Hoencamp, CEO Vodafone Ireland, explained.

“This agreement, in which infrastructure is shared between both parties, means we can concentrate investment on the intelligent part of the network that will ultimately deliver a better experience for Vodafone customers. At a retail level we will continue to compete aggressively against one another and with other operators to offer value and innovative services to consumers and businesses across the country.”

Robert Finnegan, CEO of Three Ireland, added: “Around the world, operators are adopting a network sharing and consolidation strategy that delivers cost efficiencies and rapid network expansion with the roll out of new technologies, such as LTE, while still competing fiercely on customer service and acquisition.

“Today’s announcement is significant for Irish consumers – jointly we’re creating the largest physical network in Ireland with the best network quality and service. As a result of this agreement, we expect to be able to deliver the latest technologies to our customers faster than ever before.

“This new joint venture combines the best of both networks and will be the smart choice for the savvy mobile customer,” Finnegan said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years