Vodafone and Telefónica (the owner of O2), are to pool their two networks to share costs on infrastructure, sparking talk of a price war…

The formerly bitter rivals are expected to fund cheaper calls for customers with their savings of “hundreds of millions of pounds” in this current climate.

As they become one, thousands of masts will be decommissioned as they share antennas and base station sites in Ireland and masts and power supplies in Spain and Germany. In Britain They will be consolidating their 2G and 3G infrastructures, providing better call coverage, and much more choice with services such as mobile broadband for their customers (with the hopes to supersede an unsuccessful deal that Vodafone had previously struck with Orange).

Competition regulators are keeping a close eye on this merger; it is initially set to cover the UK, the Irish Republic, Spain and Germany. However the two companies are insisting they will still be competing fiercely on services and price, and will keep their total of 549 million customers worldwide separate.

Although both Vodafone and O2 insist that competition on the retail side of the business would remain highly competitive, however it’s important to note neither has actually committed to using the savings to cut tariffs for customers…..

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