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A network-sharing deal between Telecom Italia (TIM) and Vodafone Italia will see the two largest Italian telecoms by subscriber count pool their mobile tower resources, giving both network operators greater infrastructural flexibility and allowing them to expedite their respective 5G rollouts, according to Light Reading.
Here’s what the telecoms have agreed on: The companies will pool their combined 22,000 towers under TIM’s subsidiary Inwit, with TIM paying Vodafone €2.1 billion ($2.4 billion).
Each company will maintain a 37.5% stake in the tower-operating venture and have the option to reduce their stakes down to 25% in order to attract new outside investors, meaning they’ll retain joint control over Inwit regardless of investment. Each network operator paid around €2.4 billion ($2.7 billion) for 5G spectrum during Italy’s auction last year.
The tie-up between Vodafone Italia and TIM is just the latest in a spate of network-sharing agreements between telecoms in recent months.
- Vodafone UK and Telefónica agreed to enable mutual use of 5G networking equipment at network sites in the UK to accelerate deployment and reduce redundant costs. Vodafone’s 5G network is up and running in 15 UK cities and towns, with plans to expand throughout the rest of the year, while Telefónica’s O2 brand plans to launch 5G service in the UK’s four capitals by year’s end.
- In South Korea, the three main mobile telecoms SK Telecom, KT, and LG Uplus launched their 5G networks simultaneously, using shared network assets and facilities after coordination from governmental ministries. This network- and asset-sharing system has made the peninsular state the exemplar of 5G technology, with more than 1 million consumers using 5G devices just months after the networks went live.
The bigger picture: Network assets like towers are the key to getting 5G networks up and running, and companies like Vodafone with wide-ranging infrastructure from years of operations are poised to cash in.
A key difference between past wireless standards and 5G networks is that 5G takes advantage of higher-bandwidth millimeter-wave (mmWave) spectrum. This allows data to fly over airwaves at blazing speeds — AT&T 5G tests showed download speeds of 1.8 Gbps in Los Angeles, compared to average 4G LTE speeds of 37.1 Mbps (1 Gbps is 1,000 times more data transferred per second than 1 Mbps).
But it also means that telecoms need more network cells and towers to blanket areas with that mmWave signal, which dissipates quickly and is easily blocked by physical structures.
Working with operators around Europe could help accelerate 5G deployment for telecoms while also allowing them to rake in cash to reduce debt levels. Vodafone is looking to spin out its tower assets — it operates more than 60,000 across the continent — into a separate Europe-wide subsidiary that could be worth $20 billion.
By sharing its towers with telecoms that own spectrum but lack the means to efficiently build towers to widely deploy 5G networks, Vodafone can bring in even more revenue without compromising its core network service.
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