Bloomberg News

Telefonica Expects German Network-Sharing Agreement This Year

November 30, 2011

Nov. 30 (Bloomberg) -- Telefonica SA’s German unit expects to reach an accord with two other phone operators on sharing network infrastructure by the end of the year to reduce the cost of carrying growing data volumes, its head, Rene Schuster said.

Telefonica is in talks with a “magenta” and a “red” network operator in Germany to share the costs of fiber networks that transport signals from wireless towers over large distances, Schuster said at a press event late yesterday, without naming Deutsche Telekom AG and Vodafone Group Plc., who use those colors respectively in their corporate branding.

Sharing costs would make it easier to satisfy demand for increased bandwidth as more people use smartphones and faster long-term evolution technology is rolled out in Germany.

Telefonica, Europe’s biggest phone company by market value, plans to make the faster LTE technology available in the country’s biggest cities Berlin, Hamburg and Munich by the second quarter, Schuster said, adding that ten additional cities are set to follow by the end of September.

Deutsche Telekom, Vodafone and Telefonica are starting to reach cities in Germany with LTE after fulfilling regulatory requirements to cover rural communities which don’t have broadband wireless coverage. Madrid-based Telefonica spent 1.38 billion euros ($1.83 billion) on wireless frequencies in Germany last year.

--Editors: Kim McLaughlin, Robert Valpuesta

To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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