Mobile networks Vodafone and O2 have signed a decade-long deal to share their network infrastructure in a bid to improve performance and coverage.
The firms previously established a similar arrangement in 2012 in a bid to improve the roll-out of 4G, and eventually 5G once the standard was launched.
The deal would also extend to Three if its merger with Vodafone is approved by the Competition and Markets Authority (CMA). The resulting company has yet to have an official name, but is currently referred to as MergeCo. An investigation into the deal was launched in March over concerns that it could lead to higher prices for consumers.
While many elements of the new agreement expand on the existing arrangement, if the merger goes ahead, the operators have agreed that Virgin Media O2 will acquire spectrum from the newly created MergeCo. Virgin Media O2 said the proposals would ensure “better alignment of spectrum holding” in an attempt to assuage regulators.
If approved, MergeCo has said it will invest £11bn in the UK over 10 years to create “one of Europe’s most advanced standalone 5G networks”. Standalone 5G is considered superior to other implementations of the technology which partially rely on older 4G technology.
According to Ahmed Essam, Vodafone’s European Markets CEO, the new infrastructure-sharing deal will “transform the mobile experience for over 50 million customers in the UK for the long term”.
“The proposed merger, together with this agreement, will boost competition by establishing a strong third player in the UK mobile market and will improve the balance of spectrum holdings, levelling the playing field between the UK’s mobile operators,” he added.
In 2020, the four major operators – EE, O2, Three and Vodafone – signed a £1bn deal to expand rural mobile network coverage by sharing their infrastructure to help boost coverage in hard-to-reach areas.
But in May, the Public Accounts Committee warned that efforts to increase 4G coverage to 95% of the UK’s landmass by the end of 2025 are at risk of being missed.
Lutz Schüler, CEO of Virgin Media O2, said: “We believe that this new agreement addresses the issues we have voiced and the CMA outlined in its initial decision, and will now continue our engagement with the regulator in this spirit.”