Page last updated at 12:36 GMT, Monday, 23 March 2009

Vodafone and O2 to share networks

Man on his mobile phone
Vodafone is continuing efforts to cut 1bn of costs

Mobile phone firms Vodafone and O2 parent Telefonica are to pool their network infrastructures in the UK and three other European countries.

The move will save both firms many millions of pounds in operating costs, and Telefonica admitted "the current economic situation was a catalyst".

In addition to the UK, they will share masts and other equipment in Germany, Spain and the Irish Republic.

They said they would remain rivals and there should be no competition issues.

UK-based Vodafone already has a similar tie-up with France Telecom's Orange in Britain and Spain.

Wider cost-cutting

"We will still compete... in terms of services for customers," said Matthew Key, the chief executive of Telefonica Europe.

Michel Combes, chief executive of Vodafone Europe, added that the two firms would continue to process and transmit signals on a separate basis.

The announcement comes as Vodafone seeks to implement £1bn of cost reductions.

Last month it announced 500 job cuts.

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