Eircom and O2 announce Irish network share

The second and third-placed mobile operators in the Irish market, incumbent Eircom and Telefonica’s O2, have announced that they are to share networks in a deal that Eircom described as the first of its kind in Ireland. Eircom said that the deal will “result in an unrivalled mobile experience for customers” as the two carriers seek to meet growing demand for high bandwidth services.

The firms said they plan to collaborate on areas such as power supply and site equipment as well as transmission sharing. Existing sites will be consolidated where possible, they said, and new sites jointly built. But the carriers were at pains to point out that the deal did not herald any more formal consolidation.

“While O2 and eircom will work closely together, there is no transfer of assets and spectrum will not be shared under the new arrangement. All mobile operations supported by O2 (O2 and Tesco Mobile) and eircom Group (Meteor and eMobile) will continue to compete with each other, ensuring that customer choice in the market is maintained, “ Eircom said in a statement.

With the Irish economy in dire straits, cost cutting strategies such as network sharing are likely to be crucial for the nation’s operators. The two carriers did not reveal the scope of the savings they expect to reap from the new initiative.

Eircom sits in third place in the Irish mobile market, closing out 2010 with 1.05 million customers, according to Informa’s WCIS. O2 sat second, with 1.66 million customers, while Vodafone led the market with 2.22 million. In fourth place, 3 Ireland has seen its customer base decline over the last year and had just 300,000 subscribers at end December 2010. While Eircom and O2 ruled out any amalgamation at the ownership level, it seems unlikely that Ireland, a nation in financial trouble, with only 4.5 million inhabitants, will be able to sustain four mobile operators.