Thursday, August 1, 2013

Mobile Operators Agree to Network Infrastructure Sharing in Spain

Telefónica’s subsidiary Movistar and TeliaSonera’s Spanish subsidiary Yoigo agreed to a network infrastructure sharing in Spain.

Under the deal, the current national roaming contract for Yoigo to use Telefónica's 2G and 3G networks, signed in 2008, has been extended to 2016. This allows Yoigo to continue to offer mobile voice services throughout all Spain.

Telefónica will gain access to Yoigo’s 4G network. Yoigo was the first operator in Spain to announce the launch of 4G services -- beginning with Madrid in July.  Telefónica will be able to use Yoigo’s access network over 1800 MHz, allowing it to offer its customers ultra-fast 4G mobile broadband services under its Movistar brand.

Yoigo's 4G networkuses 2x10 MHz in 1800 MHz.  The rollout is expected to reach 48% of the population by the end of the year, which means bringing 4G to all cities with more than 70,000 inhabitants, making it the largest 4G network announced to date in Spain. To reach the speed permitted by 4G access, the agreement includes the use of Telefónica's transport network. To do this, Yoigo will contract new transmission capabilities from Telefónica, extending the agreement previously signed by the two companies.

Telefónica said it goal remain to build its own 4G network once the 800 MHz frequencies it was awarded in 2011, along with 2600 MHz and 900 MHz, are available, which represented an investment of around €900 million.

The agreement includes the commercial distribution of Telefónica’s fixed services by Yoigo. This enables Yoigo to offer its customers an integrated fixed mobile service - a service package of voice and fixed broadband with one or more mobile lines, including the subscription fee, at a fixed price and with one invoice only. The integrated product, which Yoigo will be able to commercialize in all its sales channels, will include its own mobile services and Telefonica’s fixed services of voice and broadband, both ADSL and fiber.

In addition, Yoigo and Telefónica will sell mobile towers to Abertis Telecom.  The agreement is expected to be carried out in the fourth quarter of 2013.  Abertis acquiring at least 4,227 passive infrastructures from these operators for €385 million.  Albertis will upgrade most and dismantle those that overlap.
After this acquisition, Telefónica and Yoigo's equipment will be hosted on the same infrastructures. Yoigo expects to generate EUR 60-70 million, helping it to reduce future operating costs.