DENVER, United States, and TORONTO—In the first such announcements from operators for second-generation (2G) networks, two separate network sharing agreements were announced this week—one between two U.S. operators and one between two Canadian carriers.
In the United States, Cingular Wireless and VoiceStream Wireless entered into an infrastructure joint venture allowing Cingular to use VoiceStream’s network to offer service in New York and VoiceStream to use Cingular’s network to offer service in California and Nevada. The carriers said the agreement will save them hundreds of millions of dollars in capital expenditures and operating expenses going forward.
The carriers pointed out that while they will share GSM network infrastructure in the shared markets, each will retain its own licenses and market its services independently to customers using its own brand names.
The deal is expected to close early next year.
In addition, Canada’s Bell Mobility and Telus Mobility have signed a deal to piggyback on each other’s networks in rural areas. It means Bell Mobility is canceling its plans to extend its wireless network into rural areas in the west, while Telus Mobility is deferring its expansion into rural Ontario and Quebec.
The pact is expected to save each carrier at least C$500 million (US$317 million) in capital expenditures, and it will allow them to start selling digital services across most of Canada at least two years earlier than if they had built their own networks.
Network sharing agreements have been announced in Europe, mainly to alleviate the high costs of building out third-generation (3G) equipment. These North American announcements are the first network sharing announcements involving only 2G infrastructure.
