Telefonica UK and Vodafone UK have agreed to jointly operate and manage a single network grid in the UK that will run two competing nationwide mobile internet and voice networks.

Both companies will retain complete control over their wireless spectrum, intelligent core networks and customer data. They will continue to actively compete with each other in all products and services, enabled through the ‘intelligent’ parts of their networks.

It will also ensure that the capability for the next generation of 4G mobile services is rolled out as widely and rapidly as possible, helping to close the digital divide between rural and urban areas. The partnership will lay the foundations for two competing 4G networks to deliver a nationwide 4G service faster than could be achieved independently and up to two years before the anticipated regulatory requirement of 98% population coverage by 2017.

A new 50/50 joint venture company will be created through the consolidation of both Telefonica UK and Vodafone UK’s existing basic network infrastructure, including towers and masts, which will be transferred to the joint venture or decommissioned over time. Under the proposals, both companies will have access to a single grid of 18,500 masts representing an increase in sites of more than 40% for each operator. The joint venture will also be responsible for the building of new sites needed to extend coverage into rural and remote areas.

There will be opportunities for the decommissioning of duplicate sites and, as a result, the two companies expect there will be a more than 10% overall reduction in the total number of sites, in the UK, used by the two operators.

Each operator will over time take the responsibility for design, management and maintenance of the radio equipment as well as local transmission (that connects to each operator’s intelligent backbone network) in one half of the country. Telefonica UK will manage and maintain these elements in the East (including Northern Ireland and most of Scotland) and Vodafone UK in the West (including Wales).

“This partnership is about working smarter as an industry, so that we can focus on what really matters to our customers delivering a superfast network up to two years faster than Ofcom envisages and to as many people as possible. One physical grid, running independent networks, will mean greater efficiency, fewer site builds, broader coverage and, crucially, investment in innovation and better competition for the customer”, said Ronan Dunne, CEO Telefonica UK.

Guy Laurence, CEO Vodafone UK said, “This partnership will improve the service that customers receive today and give Britain the 4G networks that it will need tomorrow.”

Just as under Cornerstone, the two companies existing network partnership, all shared sites will continue to carry Telefonica UK’s traffic on Telefonica’s spectrum and Vodafone UK’s traffic on Vodafone’s spectrum.

Both operators will continue to remain responsible for their own existing spectrum holdings and for fulfilling their own spectrum needs in the future. The launch of 4G services is subject to the outcome of the forthcoming Ofcom auction of new spectrum and both companies will act wholly independently in that auction.

Telefonica UK and Vodafone UK are currently engaged in discussions with Ofcom and intend to establish the joint venture and network shari