Vodafone Group PLC (VOD) and France Telecom's (FTE) mobile arm Orange are creating a joint-venture to share their mobile phone infrastructure in the U.K. and may outsource some of the work to an external company, a Vodafone spokeswoman said Wednesday, announced Wall Street Journal on 19 September.
Vodafone officials are meeting with staff to update them on progress the two companies have made after announcing in February that it intends to share radio networks with Orange across the U.K. as part of efforts to cut operating costs.
"Between us we have agreed that we will create a joint-venture that will be responsible for the consolidation and design of the network," the Vodafone spokeswoman said. "We are also investigating the possibility of outsourcing some of the work that Vodafone and Orange currently does," she added.
In February, the companies signed a non-binding, heads of terms agreement, in which they said they planned to combine radio access networks and work together to build new third-generation phone masts. The joint-venture will cement this agreement.
Vodafone and Orange's U.K. deal follows a similar agreement in Spain, which was signed last year, and is designed to bring better 3G coverage to the two operators' combined 30 million plus customer base in the United Kingdom.
Vodafone declined to comment on whether the joint-venture to combine and manage the thousands of telephone masts the two company's U.K. would lead to job losses, but an outsourcing agreement with an infrastructure firm such as Telefon AB LM Ericsson (ERIC) or Nokia Siemens Networks (NOK) would likely lead to a transferal of staff.
In December 2005, U.K. 3G phone operator Hutchison 3 (0013.HK) struck a deal with Ericsson to manage its telephone and IT Infrastructure in the U.K., which saw around 1,000 employees transfer to the Swedish firm.
Longer-term, Vodafone and Orange say they plan to reduce the total number of phone masts in the U.K., but will also increase the scope of 3G coverage in rural areas. Third generation, or 3G, technology allows faster transfers of data via mobile phones, allowing consumers to access music, video and other data content via their handsets.
