Optus and Vodafone sign an agreement to pool resources

A new agreement between Optus and Vodafone will improve network performance

Optus has signed a binding memorandum of understanding with Vodafone, striking an agreement to combine the telcos' resources to improve network coverage and cut costs.

An Optus staff memo stated the agreement between Vodafone and Optus will add 1000 new sites to the existing Optus network, pending approval of the partnership from the ACCC.

“The new agreement will also allow us to deploy 3G on our existing low frequency 900MHz spectrum on over 3,800 sites in the extended site sharing joint venture,” the email said.

“Put simply, these two changes will enable Optus to make substantial outdoor and, more critically, indoor 3G coverage improvements across Australia in a much shorter timeframe than going it alone.”

The memo also stated the partnership will allow the telco to expand within a more sustainable cost structure.

“This agreement enables us to share both capital and operating costs more efficiently with VHA. We will also benefit from a new commitment by VHA to move all of their domestic roaming traffic over from Telstra to Optus, delivering us a substantial financial benefit over the next five years,” the email said.

The agreement will also allow the two telcos to more aggressively pursue the rollout of 3.5G (HSPA+) and 4G services.

“Both are critical to enable Optus to meet our customers’ expectations for continuing improvements in customer experience, particularly in relation to faster data speeds and network consistency,” the email said.

As part of the agreement, Vodafone also announced today it will add 400 base stations to its network from Optus base station sites and will jointly build another 500 new base stations with Optus across shared sites over the next four years.

In total, Vodafone will add 1800 new base stations to its network in a bid to improve coverage across Australia and has already begun integrating 900 base stations into its mobile 3 network.

“We’ve listened to our customers and we’re responding to their demands by delivering a better, faster, more reliable network across Australia,” said Vodafone chief executive in a statement.

Vodafone said the increased network capabilities will extend the telco’s coverage to 96 per cent of the Australian population.

The embattled telco has been trying to claw back customers after losing 375,000 customers last year due to network issues and customer service problems.

In its 2011 annual report, the Telecommunications Industry Ombudsman said new complaints about Vodafone had tripled in 2010-11 to 32,744.

Vodafone has tried several different strategies to win back consumers, including offering free SMS messages and recently guaranteeing customers could cancel their post-paid contract within 30 days if they were unhappy with the telco’s network performance.

The telco has spent a considerable amount of money trying to clean up its network, including spending over $1 billion on a new network and rolling out more than 1100 new 850MHz 3G sites. A further 400 new 850MHz 3G sites are scheduled to be operational in the next few months.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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