3G Network Merger Announced Between Vodafone & Orange

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As a result of the telecoms operators continuing to pursue their drive for cost saving efficiencies within their respective businesses,Vodafone and Orange in a joint statement have announced their intention to merge their third generation networks.   This move is brought about mainly as a result of fierce competition and the need to deliver improving value to their shareholders. Depending most probably on the success of this latest venture, they may in the future wish to merge their older 2G networks.

It is understood that the deal will see both operators continuing to manage their own customer base and revenues independently whilst remaining fierce competitors in the UK markets.

“This proposal is industry leading and will enable the two companies to remain vigorously competitive against each other in the market,” said Nick Read, CEO of Vodafone UK. The benefits of network sharing according to Nick Read will include “notably faster roll out of high speed mobile services in the future and the earlier introduction of innovative products".

Most importantly for land and property owners the collaboration between the two companies will most likely result in a reduction in the total number of planned and existing mobile phone masts across the UK.

Whilst the structure of any deal between the two is still to be worked out, land and property owners with existing Vodafone or Orange installations should be very wary of planned changes to their site which might facilitate the merger of these two operators’ networks. Consideration should be given as to whether the existing contractual obligations of the lease between the parties would be breached should a sharing of structures, equipment or indeed frequencies occur without the landlord's consent.  Quite often where the two wish to share a site, there may be the opportunity for landowners to negotiate an additional annual site share payment equating up to 35% of the net monies passing between the two.

For more information on this and all aspects of telecommunications property advice, please contact Chris Hicks of Fisher German on 01858 411202.

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