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LONDON (Alliance News) - Vodafone Group PLC said Wednesday it has entered a non-binding heads of terms with Telefonica UK Ltd to "strengthen" the existing network partnership between the two mobile service providers.
FTSE 100-listed Vodafone said it plans to extend its existing network sharing partnership with O2's Spanish owner Telfonica SA to include 5G at joint radio sites.
The telecommunications companies said this will allow them to deploy 5G faster and offer 5G services to more customers over a wider geographic area. Vodafone also believes the partnership will allow them offer 5G at a lower cost.
Vodafone UK Chief Executive Officer Nick Jeffery said: "We believe that these plans will generate significant benefits for our business and our customers as we move into the digital era of connected devices, appliances and systems on a mass scale. Customers will benefit from the best 5G experience available and we will deliver even faster speeds by using our spectrum holding more effectively."
The agreement has yet to be finalised and the two firms said they are hoping to agree to leaglly binding terms in 2019.
Vodafone and O2 said they are also planing to upgrade their transmission networks with higher capacity optical fibre cables. The upgraded network is intended to give customers the full benefit of 5G, such as low latency and improve Vodafone's economies of scale.
Cornerstone Telecommunications Infrastructure Ltd, a 50-50 joint venture between Vodafone and O2, is expected to receive additional responsibility in the planned extension.
CTIL, which owns and manages passive tower infrastructure for the companies, will be expected to improve the efficiency of operations during the planned extension. Vodafone said it will also look to monetise CTIL if the joint venture is able to find third party tenants to its towers.
Shares in Vodafone were down 0.3% Wednesday morning at 147.70 pence each.
