Hutchison and Vodafone seal Ireland network deal
Hutchison Whampoa, the flagship conglomerate of Li Ka-shing, yesterday forged an agreement with British telecommunications giant Vodafone to merge their mobile networks in Ireland into a 50-50 joint venture.
That combination of infrastructure marks the first deal of its kind in Ireland and is expected to create the country's biggest mobile network.
Hutchison's Three Ireland unit and Vodafone Ireland will share their physical network and site infrastructure at more than 2,000 locations across the country. It is a strategy that is being widely adopted by many operators to cut costs, without compromising service to customers.
Both Irish operators said they would continue to run separately the 'intelligent' elements of this unified mobile infrastructure, including their core network capabilities and service platforms. They will also independently manage their own radio equipment and spectrum.
'Around the world, operators are adopting a network-sharing and consolidation strategy that delivers cost efficiencies and rapid network expansion with the roll-out of new technologies such as LTE [standard for high-speed 4G mobile], whilst still competing fiercely on customer service and acquisition,' said Three Ireland chief Robert Finnegan.
Savings for each mobile carrier are estimated to be worth more than GBP200 million (HK$2.43 billion) over five years, the Financial Times has reported, citing a person with knowledge of the negotiations.
Under the kind of arrangement agreed by Three Ireland and Vodafone Ireland, duplicate sites will be decommissioned and each operator will have access to the other's network sites. But each retains the flexibility to invest in dedicated sites and the pace of technology deployment.
The joint-venture company is expected to be fully operational from autumn and will be headquartered in Dublin. The managing director will be appointed from an independent pool of talent and the new company will have its own management board.
About 80 employees will transfer from Vodafone Ireland and Three Ireland to the joint-venture company after a consultation period.
Launched in 2005, Three Ireland has invested more than this much, in pounds, building its Irish network