The partnership is the first mobile network sharing deal in the country, but O2 Ireland's mother company, Telefónica Europe plc (O2) has done this kind of deal before. (See O2, eircom Ink Mobile Network Sharing Deal and VOD, O2 Share Nets.)
O2 Ireland -- which has about 1.7 million mobile subscribers -- and eircom -- which has just over 1 million mobile customers -- have agreed to share site equipment, power supply, technology and transmission. The operators said they will try to consolidate existing sites wherever possible, and that they will build any new sites together. A dedicated team of existing employees from both companies will manage the build and operation of the distinct networks.
What the operators are not sharing is spectrum, and there will not be a transfer of assets under the terms of the agreement.
Why this matters
This partnership is the latest sign that mobile operators are keen to explore network sharing as a way to improve network efficiencies and reduce operating costs. For many, such deals appear to be viable ways to cut the costs of building out network coverage.
This is the first network sharing arrangement in Ireland. O2 and eircom are the second and third largest mobile operators in the country, respectively, after Vodafone Ireland .
But elsewhere O2 is a something of a dab hand at network sharing because Telefónica Europe has had a broad network sharing agreement in place with Vodafone Group plc (NYSE: VOD) since 2009. The two operators are sharing cell sites in Germany, Spain and the UK.
In an interview with Light Reading Mobile, Telefónica Europe CEO Matthew Key pointed to the network sharing deal with Vodafone in the UK, which he referred to as "Cornerstone," as one of the ways the operator is improving its network to cope with the surge in mobile data traffic from smartphones like Apple Inc. (Nasdaq: AAPL) 's iPhone. (See MWC 2011: Telefonica Rises to Mobile Data Challenge.)
Here are just some of the latest network sharing deals and more on the pros and cons of network sharing:
- Etisalat, Reliance Strike Mega Network Share Deal
- India's Carriers Edge Toward Network Sharing
- Are LTE NetCos on the Horizon?
- Will More Mobile Operators Dare to Share?
- Time for a Mobile NetCo?
- 3 & T-Mobile Share 3G in the UK
- Net Sharing in the Slow Lane
- Vodafone, Orange to Share RANs
- 'Tis the Season for Sharing?
— Michelle Donegan, European Editor, Light Reading Mobile