Vodafone and Telefonica have confirmed recent speculation that they are to share network infrastructure across Europe in what is considered the largest ever deal of its kind. UK-based Vodafone and Spain’s Telefonica said in a joint statement this morning they would share mobile network assets in four European markets where both have operations – Germany, Spain, Ireland and the UK – while discussions are ongoing to extend the agreement to a fifth market, the Czech Republic. The operators said the deal would lead to cost savings “amounting to hundreds of millions of pounds” for both companies over the next ten years. The implementation of the network sharing will differ slightly across the four initial markets, but will typically see the operators share existing 2G and 3G sites and jointly build-out new sites. In Spain, the deal builds on an existing agreement that has seen the two operators already share 2,200 sites to date. The deal is aimed at supporting the delivery of services such as mobile broadband to a greater number of customers across a wider coverage area, and reducing the environmental impact of the network by lowering the number of sites required by each company.

“This industry-leading collaboration means that Telefonica and Vodafone will continue to compete strongly against each other in local markets, while giving our customers enhanced mobile coverage in more places, using fewer mast sites,” said Matthew Key, CEO of Telefonica Europe. According to a Reuters report, Key added on a conference call that the current economic situation had been “a catalyst” for the deal. Michel Combes, chief executive of Vodafone Europe, added that he saw no regulatory issues with the agreement as it was a “passive” network-sharing deal, which does not involve sharing transmission equipment. According to Reuters figures, the agreement covers about 64 million Telefonica customers and about 77 million Vodafone customers.