The world’s largest mobile operator, Vodafone Group Plc, has reach an agreement to share its 3G network in Spain with local rival Orange Spain, formerly Amena Movil. The move is the latest in a number of cost-cutting measures recently undertaken by the Newbury, UK-based operator.
Under the terms of the agreement, Vodafone Spain and Orange Spain will share 1,000 3G base stations by October 2007, rising to 5,000 over the next four years. This will allow the two operators to offer 3G services to small rural towns in Spain, and is expected to increase their 3G network coverage by 25%.
The main advantage to Vodafone and Orange is that it will allow them to marshall their resources to take on the dominant mobile operator, Telefonica Moviles Espana. The agreement also means that Vodafone and Orange will need 40% less base stations to provide their services in the areas covered by the agreement.
The existing network will continue to be managed solely by Vodafone, but each operator can their own traffic independently while retaining full responsibility for the quality of service it offers to customers.
The agreement covers selected towns with fewer than 25,000 residents. The agreement also provides for extending the co-operation to 2G networks in small towns.
This agreement will enable us to optimize and rationalize the layout of the 3G networks in Spain as well as limit the environmental impact of the infrastructure required to provide mobile services, said the MD of France Telecom (Orange) in Spain, Belarmino GarcÃa.
Vodafone undertook a number of cost-saving measures after posting the largest-ever corporate loss in UK history earlier this year. These cost cutting measures includes offloading its Japanese operation, selling its 25% stake Belgian mobile operator Proximus, and outsourcing its application development and maintenance functions.