Vodafone and O2 could share networks

According to reports in The Guardian and Mobile, O2 and Vodafone are about to announce a network-sharing deal.

Vodafone already has a similar-ish deal with Orange, although that arrangement is only for the sharing of sites, not actual transmission. Orange is now reportedly looking to turn T-Mobile and 3's own network-sharing deal into a three-way affair – which would effectively leave the UK with two distinct mobile phone networks.

ZDNet UK tried to get Vodafone and O2 to back up the reports, but neither wanted to comment beyond these statements:

Vodafone: We regularly review our plans to ensure Vodafone UK is best placed to take advantage of network sharing schemes now and in the future. We will provide any relevant updates as appropriate.

O2: Network sharing is an area we continue to review. We already undertake extensive site sharing and, while there is clearly potential for significant cost savings, we must ensure that customer experience will not be adversely impacted.

So what are the benefits of operators tying themselves to one another? The biggest is cost-saving – installing and maintaining base stations is not a cheap endeavour. It makes sense to share, particularly when LTE is only a couple of years from reality (bear in mind that LTE, like mobile WiMax, is a rip-out-and-replace network upgrade).

It also means overall coverage is improved in terms of quality and, potentially, extent – a very important factor when taking into consideration the role that mobile networks are being asked by the government to play in fulfilling the universal service obligation for broadband.

If the reports are correct, though, the next question is this: why have five faces on what will effectively be two networks? Network-sharing is potentially a step towards industry consolidation.