Telefónica UK Limited (“O2”) and Vodafone Limited (“Vodafone”) have entered into non-binding heads of terms intended to strengthen their existing network sharing partnership.
O2 and Vodafone plan to extend the existing network sharing partnership term and include 5G at joint radio network sites. This would enable both O2 and Vodafone to deploy 5G faster, to offer 5G services to more customers over a wider geographic area, and to do so at a lower cost.
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% of sites outside London.
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. O2 and Vodafone 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.
O2 and Vodafone 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.
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