Vodafone, Optus to share 3G network

In a statement issued to the market this morning, the two telecommunications companies said they would "work together to build and operate a joint national 3G radio network infrastructure".

Optus Mobile managing director, Allen Lew, said the radio access network represented around two-thirds of the capital costs of a third-generation network, "so to be able to share this cost with another company is beneficial".

Optus said in a later statement it had estimated the costs of rolling out 2,000 3G stations to cover Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra to be in the order of AU$435 million.

"Under the proposed agreement with Vodafone Austalia, Optus estimates that this capital expenditure will be reduced by between AU$130 million and AU$140 million.

"In addition, Optus estimates that, over a 10-year period, operating expenditure for maintenance, operations and site leases will be reduced by approximately AU$100 million".

The companies said they expected to sign a long-form agreement by late October, with the arrangements conditional on necessary regulatory approvals.

The two companies will provide separate customer services and said they would "compete vigorously for customer business".

The move comes just three weeks after Hutchison 3G Australia signed a heads of agreement with Telstra to establish a 50/50 joint venture to own and operate H3GA's radio access network and fund future network development. The deal -- whereby Telstra will pay AU$450 million to its rival -- also allows both parties to share their 3G spectrum. The parties said they expected to finalise the deal by November, pending clearance of regulatory hurdles.