Vodafone and Orange to Jointly Seek Outsourcing Partner

September 26, 2007

UK mobile operators Orange and Vodafone have reportedly finalised their proposed network sharing agreement and, according to at least one UK newspaper, will today announce they are looking for an outsourcing partner to maintain the thousands of radio masts they operate across Britain.

The deal, first announced in February of this year, will mean each company will need to build fewer masts to complete their 3G coverage of the UK it may also lead to redundancies as a new joint venture company takes control of the network. It is thought that the new company will also seek to outsource much of the building and management of the radio network. Last year 3, owned by Hutchison Whampoa, signed a seven-year £1bn outsourcing deal with Ericsson which saw more than 1,000 staff transfer to the Swedish firm.

Earlier this month rumours surfaced that rival UK mobile companies T-Mobile and 3 were exploring the possibility of sharing their networks in the future. Should the plan go ahead it would significantly cut costs for both companies. In fact, some analysts have argued that such an agreement could be the first step in a possible take-over of the greenfield mobile company by the established German-owned operator.

The loss-making 3 says it has the most comprehensive 3G network in Britain. Yet even so, it can only point to 90% coverage of the UK's population, while T-Mobile has 85% coverage. Clearly the sharing of networks would help T-Mobile increase its coverage, however, the main attraction for a network sharing deal is said to be the chance to cut costs in the face of a fiercely competitive market.