Vodafone and Hutchison Whampoa are in the final stages of discussions about merging their Irish mobile infrastructure, according to multiple reports.
Vodafone and Hutchison (which operates the 3 brand in Ireland) reportedly have agree to form a joint venture that will run the network, but with both firms retaining ownership of their spectrum holdings and offering competing services, according to reports from the Financial Times, Bloomberg and Reuters. No formal deal has been signed yet, however.
One source close to the negotiations old the FT that the network-sharing agreement could result in each business saving in excess of £200 million over a five-year period. If the deal is signed, the merger of network assets would be less likely to raise objections from competition regulators in Europe, given that the number of firms offering mobile services in Ireland would not be reduced, the report said.
Robin Bienenstock, an analyst at Bernstein, told the FT that sharing network infrastructure was an "attractive strategy and one that the regulator is unlikely to block as it would serve everybody's interests."
An agreement in Ireland would echo the recent announcement made by Vodafone and Telefónica to share their UK mobile networks in an effort to rein in capital expenditures associated with improving their 3G coverage and deploying LTE.
The average European operator, according to researcher Idate, will spend about €2 billion to upgrade an existing network to LTE to cover 75 per cent of a country with 50 million people, according to Bloomberg.
Separately, the European Commission approved Vodafone's acquisition of Cable & Wireless Worldwide. "The Commission concluded that the transaction would raise no competition concerns, as the parties' activities are largely complementary," according to a Bloomberg report.
For more:
- see this Financial Times article (sub. req.)
- see this Bloomberg article
- see this Reuters article
- see this separate Bloomberg article
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