Vodafone and 3 to enter 50/50 Ireland network deal

The two mobile networks are in the late stages of discussions to pool their network infrastructure, a source tells Computer Weekly

Vodafone and 3 are set to join forces in Ireland to share their network infrastructure, Computer Weekly has learned.

A source close to the situation revealed the details to us this morning, saying it would be a 50/50 deal with equal investment from both firms. 

However, the source said it will only involve the back-end networking and not any intelligent aspects, such as spectrum, where the two operators may compete, and these elements will remain solely in control of Vodafone and 3 respectively.

“The two companies have been in discussion for some time and are in the late stages, but nothing has been finalised yet,” said the source.

The deal would be similar to what Vodafone has done in the UK with O2, where the operators will use the same infrastructure at the back end to create what they describe as a “national grid” for running their separate networks.  

Both deals will lead to major cost savings in the daily upkeep of the infrastructure, as well as splitting the bill for investment into future network equipment and freeing up cash for investments into other areas of business for the operators, rather than ploughing it into keeping the lights on.

Rob Bamforth, principal analyst at Quocirca, said these types of deals will be beneficial to customers in the long run.

“Why do users need several almost overlapping networks, when they would be better served with one better-sized network with wider coverage?” he said.

Bamforth admitted there could be a competition argument against the tie-up if the networks become too large, but the change in focus from the back end to the customer facing aspect could only lead to improvements.

“It might be an indication that operator thinking is moving up from core network commodity towards the service and value that they deliver to customers. That would be welcome,” he added.

A spokeswoman from 3 Ireland told Computer Weekly the company “isn’t commenting on market rumour and speculation”.

We had not received a response for our request for comment from Vodafone at the time of publication.

Read more on Voice networking and VoIP