SFR, the number two mobile operator in France, announced on Monday it had entered exclusive talks with competitor Bouygues Telecom "to share parts of their mobile networks".
In an interview with ZDNet.fr, SFR general secretary Olivier Henrard said that the deal between the two companies will allow them to offer "a better network in the areas where network-sharing gets put in place" in order to improve both coverage and quality of service.
SFR claims its 3G network covers 99 percent of the French population, and 99.6 percent for GSM/GPRS. Bouygues Telecom meanwhile claims 96 percent 3G+ coverage, and a 99 percent GSM/GPRS coverage. The two companies said they hope to aim to seal the network sharing deal by the end of the year.
If it goes ahead, the two companies will share their 2G, 3G and 4G networks except in very population-dense areas.
SFR's and Bouygues Telecom's press release mentions "profound changes" affecting the telecoms market as the motive for the talks. France's fourth-placed operator , Free Mobile, is not explicitly mentioned but the infrastructure sharing may be a way for SFR and Bouygues Telecom to actively compete against the upstart on both coverage and quality of service, instead of purely on pricing.
Since it launched its first offerings in January 2012 — with a €19.99 all-inclusive monthly non-bounding subscription — Free Mobile has managed to garner 6.1 million customers. But, according to Degrouptest, the company is lagging against rivals on download speeds.
The deal will also allow SFR to "to speed up the rollout of 4G", according to Henrard.
Under the deal, each operator will keep on using its own LTE spectrum, he added, but the aim is to better "organise future rollouts by geography... As with 3G, in areas where one operator leads [in 4G], it will run both networks."
Recently, SFR announced it aims to cover more than 70 percent of the French population with its 4G network by the end of 2013. Bouygues Telecom will launch its 4G offerings in October, with the goal of 40 percent coverage by the close of the year. The operator recently got approval to refarm its 1800MHz spectrum to expand LTE coverage more quickly.
In a press release, the Arcep explained the proposed network-sharing between SFR and Bouygues Telecom is allowed under the terms of the country's 4G licences, but any final agreement will still need to get the regulator's approval.
According to the latest figures from the French telecoms watchdog Arcep, there were 70.9 million active mobile phone customers in France at the end of March 2013. At the end of 2012, SFR had 20.7 million mobile customers and Bouygues Telecom 11.3 million. The largest operator in the country, Orange, had 27.2 million users.