Vodafone and Telefonica UK, operating as O2, have entered into non-binding heads of terms intended to strengthen their existing network sharing partnership.
Vodafone and O2 plan to extend the existing network sharing partnership term and include 5G at joint radio network sites. This would enable both Vodafone and O2 to deploy 5G faster, to offer 5G services to more customers over a wider geographic area, and to do so at a lower cost.
“We believe that these plans will generate significant benefits for our business and our customers as we move into the digital era of connected devices, appliances and systems on a mass scale,” said Nick Jeffery, CEO of Vodafone.
“UK Customers will benefit from the best 5G experience available and we will deliver even faster speeds by using our spectrum holding more effectively.”
In addition, both parties will look to extend greater network autonomy in a number of larger cities by deploying their own separate radio equipment on approximately 2,500 sites, which represents around 15 per cent of sites outside London. This will give them even greater flexibility to meet the needs of their customers.
The companies also intend to upgrade their transmission networks with higher capacity optical fibre cables.
This would enable customers to benefit from 5G’s new features, such as low latency, as well as provide both companies with greater economies of scale and an improved choice of infrastructure partners.
The companies are also exploring options around their future transmission operating model which could drive synergies in the investment and operation of their end-to-end networks.
Vodafone and O2 further intend to devolve additional activities to CTIL, the 50:50 owned joint venture company that owns and manages the parties’ passive tower infrastructure.
This will empower CTIL to take an enhanced role in the operation of the passive infrastructure, in order to improve the efficiency of its operations and pursue opportunities to add further third party tenants to the towers. In that context, the parties will explore a potential monetisation of CTIL after the new arrangements have been finalised.
Mark Evans, CEO, Telefónica UK, added: “I’m excited by the potential of these plans to meet the future needs of our customers while delivering value for our business. In addition, these plans would allow us to utilise the spectrum we acquired in the last auction very effectively.”