Orange and Vodafone moot 3G network share

Orange and Vodafone are proposing to share their 2G and 3G networks in the UK to cut costs and improve coverage.

The two operators predict the move could produce savings of between 20 and 30 per cent in capital and operating expenditure.

Other benefits outlined by the pair include a reduction in their combined "environmental footprint" - with fewer masts being required to support the networks - and improved network coverage.

John Delaney, principle analyst with Ovum, told silicon.com sharing the radio access networks could be a good move for the operators.

He said: "The potential savings are very big indeed. UK operators, in particular, are needing to focus on costs in the absence of any likely large-scale economies."

Delaney said the sharing agreement will improve coverage for customers of both operators but warned sharing 2G base stations across the UK will be technically very difficult.

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Both Orange and Vodafone will continue to independently manage their traffic and take responsibility for quality of service. They will also remain competitors.

Delaney said: "I don't see any reason in principle why sharing networks should reduce any amount of competition either on the retail or wholesale level."

Bernard Ghillebaert, Orange UK CEO, said the proposals provide a "common sense approach" to network rollout and management in the 21st century.

The exact structure and terms of the network sharing agreement will be finalised over the next few months, the mobile operators said.