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Vodafone and Telefonica, which trades as O2 in the UK, have signed a massive network sharing deal to work together across Europe.

The two will share networks in Germany, Spain, Ireland and the UK. Talks are still going on to finalise a similar deal in the Czech Republic as well as looking at other areas of possible collaboration like transmission services.

The agreement will mean savings of hundreds of millions of euros and the companies promise it will mean better service quality for customers and faster roll-out of mobile broadband.

Each operator will continue to manage their own calls independently. Depending on the country the two will either share network sites and masts or work together on building new, shared masts and base stations.

In Germany Vodafone and Telefonica will share existing 2G and 3G sites and share masts for microwave backhaul. In Ireland both firms will open all sites and work together on new sites.

In Spain the two will extend an existing sharing agreement covering power, cabinets and masts. Currently this covers 2,200 sites but this will be increased in the next two years.

In the UK the two will concentrate on building new joint sites and consolidating existing 2G and 3G sites. The companies said: "The network electronics Nodes B (3G), BTS (2G) and the radio network controllers which are linked to the core network are to remain independent."

Vodafone shares were up two per cent in a rising market on the news.

The full release is available from here. ®

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