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Vodafone and O2 Network Infrastructure Merger Plans Approved
Published on:
Plans by Vodafone and Telefonica O2 to combine the basic parts of their UK network infrastructure to create one national grid running each operator's independent spectrum have been approved by the UK's Office of Fair Trading (OFT).
The two companies already share some elements of their network infrastructure under an agreement that was signed in March 2009.
OFT said in its ruling that it will not refer the merger to the Competition Commission after it found "no cause for concern" with the merger.
A new 50/50 joint venture company will be created through the consolidation of both O2 and Vodafone's existing basic network infrastructure, including towers and masts, which will be transferred to the joint venture or decommissioned over time.
As a result, both companies will have access to a single grid of 18,500 masts representing an increase in sites of more than 40% for each operator. They also anticipate reaching 98% population coverage with their LTE networks by 2017, two years earlier than expected to be required by next year's radio spectrum auction conditions.
Each operator will take the responsibility for design, management and maintenance of the radio equipment as well as local transmission in one half of the country. O2 will manage and maintain these elements in the East (including Northern Ireland and most of Scotland) and Vodafone in the West (including Wales).
The companies expect savings in excess of £400 million as a result of reducing their total base station portfolio by 10% from the elimination of overlapping towers.
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