Vodafone, O2 plan to pool networks - report

LONDON, March 12 - Vodafone and rival O2 plan to pool their networks in the biggest shake-up of Britain's mobile phone industry since wireless broadband was introduced at the start of this decade, the Guardian reported.

It said talks between the two companies were at "an advanced stage", with an announcement due in the next few weeks.

The Guardian also said Vodafone's existing partner Orange plans to ask T-Mobile and 3, a unit of Hutchison Whampoa Ltd <0013.HK>, for permission to join their network sharing venture, potentially leaving Britain with its five biggest mobile phone operators using just two networks.

All five companies would continue to compete under their own brand names, the paper reported. It said the move would allow a reduction in the 51,000 base stations around the country, reducing costs.

While this should lead to cheaper calls and Internet services, consumer groups may be concerned about a reduction in competition.

The paper said both the Competition Commission and the Office of Fair Trading were expected to scrutinise the two deals to see if they amounted to a merger that would reduce competition.

"We regularly review our plans to ensure Vodafone UK is best placed to take advantage of network sharing schemes now and in the future," the Guardian quoted a Vodafone spokesman as saying.

It reported a spokesman for O2 saying it was "exploring" network sharing arrangements.

Vodafone declined to comment further on the report, while O2 could not be reached for any elaboration.