Vodafone UK and O2 UK are negotiating new terms on an existing infrastructure sharing agreement in a bid to keep pace with an aggressive expansion by rival BT.
According to The Telegraph, the operators are in the midst of renegotiating a deal put in place in 2012 via a joint venture known as Cornerstone. The network sharing deal was struck ahead of the country’s 4G roll-out, and gave Telefonica-owned O2 responsibility for building and maintaining new masts in the east of the country and Vodafone in the west.
With BT’s expansion through EE a concern, the agreement is proving a source of tension between Vodafone and O2, industry sources told The Telegraph. O2 faced accusations of being slow to maintain its side of the shared network, while Vodafone is keen to secure more autonomy in major cities to speed improvements to its own capacity and coverage, the newspaper said.
Under the current terms of the deal, the pair only have autonomy to improve their own networks in London, and Vodafone followed up with investments in the capital.
Vodafone completed its multi-billion pound network investment strategy Project Spring in early 2016, and said it aims to spend another £2 billion in the next three years, to improve its domestic network and services.
A revision of the terms with O2 could grant Vodafone more autonomy in key areas, while also securing more long-term certainty for Cornerstone itself.
Following its failure to merge with CK Hutchison’s 3 UK, Telefonica’s plans for O2, and indeed its presence in the UK, have been somewhat up in the air.
Telefonica previously said it was considering floating the operator in 2017 in a bid to reduce its debt load. A more secure Cornerstone agreement could be key in discussions between Telefonica and potential institution investors, The Telegraph’s sources added.