Herbert Smith has advised Telefónica UK on its ground breaking network collaboration with Vodafone. Both companies have agreed to pool their basic network infrastructure to create one national grid of 18,500 sites, with a view to closing the digital divide between rural and urban areas.
The joint venture, which builds on the companies' existing network sharing partnership Cornerstone, will lead to improved reception for customers of both operators, and provide indoor 2G and 3G coverage for 98% of the UK population by 2015. The deal also lays the foundations for two competing 4G networks to deliver the capability for a nationwide 4G service faster than could be achieved independently.
The Herbert Smith team was led by telecoms partners Amanda Hale and Nick Elverston, and included partners Heather Gething (tax), Veronica Roberts (competition), Simon Price (property), Tim Leaver (employment) and senior corporate associate David Coulling.
Amanda Hale commented:
"This deal, part of a trend towards increased network sharing, is ground breaking for the operators and the industry as a whole. It involves a number of innovative features, in particular the East/West split, which made it particularly satisfying to work on."
Telefónica UK and Vodafone UK propose jointly to operate and manage a single network grid in the UK that will run two competing nationwide mobile internet and voice networks. Both companies will retain complete control over their wireless spectrum, intelligent core networks and customer data. They will continue to actively compete with each other in all products and services, enabled through the ‘intelligent’ parts of their networks.
A new 50/50 joint venture company will be created through the consolidation of both Telefónica UK and Vodafone UK’s existing basic network infrastructure, including towers and masts, which will be transferred to the joint venture or decommissioned over time.
Each operator will over time take the responsibility for design, management and maintenance of the radio equipment in one half of the country. Telefónica UK will manage and maintain these elements in the East (including Northern Ireland and most of Scotland) and Vodafone UK in the West (including Wales).
Telefónica UK and Vodafone UK are currently engaged in discussions with Ofcom and intend to establish the joint venture and network sharing arrangement later this year, following the satisfactory conclusion of those discussions.
Notes to editors
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