European Telecom Operators See Scope for Sharing More Infrastructure

By Adria Calatayud

BARCELONA--European telecommunications operators vowed Wednesday to step up their collaboration efforts to share infrastructure and save costs, as the industry moves to launch fifth-generation, or 5G, networks.

"There is a lot more we can do in sharing infrastructure and earning better returns" Vodafone Group PLC (VOD.LN) Chief Executive Nick Read said at a Morgan Stanley TMT conference in Barcelona.

Mr. Read said telecom companies need a "social contract" to collaborate more as an industry while keeping a competitive environment. He added that his company is having meetings with CEOs of incumbent European operators.

"They are very much engaged on the topic, which I think Europe telco has needed for a while now," Mr. Read said.

Mr. Read's remarks were echoed by Telefonica SA's (TEF.MC) Chief Operating Officer Angel Vila, who said his company is exploring network-sharing options across its main markets and has signed memorandums of understanding in countries like Brazil and Peru.

"Sharing is a must," Mr. Vila said.

Vodafone and Telefonica have a network-sharing agreement in the U.K., which earlier this year was expanded to cover 5G. The British telecommunications company has a similar arrangement in place in Spain with Orange (ORA.FR). In July, Vodafone agreed to combine its Italian tower unit with Inwit (INW.MI).

Separately, Vodafone has outlined plans to separate the 62,000 telecommunication towers it owns in Europe into a distinct entity. This European tower business is on track to launch an initial public offering in early 2021, Mr. Read said.

Telefonica also said in September that it would accelerate plans to monetize its tower portfolio, which comprises 68,000 sites across 12 markets.

"This industry has to work on returns on capital employed more than it has in the past," Mr. Vila said.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

November 13, 2019 13:14 ET (18:14 GMT)

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