Telefónica has signed a network sharing agreement for its 2G and 3G networks with TeliaSonera’s Spanish mobile division Yoigo. The agreement is intended to allow Yoigo use of Telefónica’s mobile network in the parts of Spain where it does not already have its own coverage. The Yoigo network currently has coverage across 42% of Spain. The agreement is for five years from June 1, 2008. Launched in December 2006, Yoigo is Spain’s smallest operator with approximately 427,000 customers and a quarter-on-quarter growth rate of around 40% (source: Wireless Intelligence). It markets itself as a ‘low-cost’ mobile operator with reduced tariffs. Today’s move follows a previous announcement in January from Yoigo that it planned to share networks with local rival Orange.

Analysts believe network sharing deals will become commonplace around the world. A recent report from Analysys said emerging technologies such as femtocells and LTE will require substantial investment in the near term, and operators acting alone will not be able to deliver such investment quickly enough. Cost benefits from sharing infrastructure can also be considerable, the report added. At the end of last year T-Mobile and 3UK announced a network sharing agreement which they hope will generate cost savings of £2 billion over the next ten years. Other recent high-profile 3G network sharing deals include Vodafone and Orange UK, a venture first announced in February 2007. At the time both companies said the deal aimed to achieve a 20-30% reduction in capital and operating costs whilst improving mobile phone coverage in the UK. Vodafone has also shared a rural 3G rollout in Spain with Orange.