Most of the towers are in less densely populated areas. These are places where, until now, customers would need to roam on the Vodafone network.
The agreement between the two telcos echoes the network sharing work being done by the Rural Connectivity Group. Vodafone and 2degrees, along with Spark, are partners in the RCG.
Vodafone has installed Multi Operator Radio Access Network (MoRAN) hardware on the towers. They allow 2degrees to use its own spectrum.
Adding these towers means the carrier can fill in the remaining gaps in the company’s coverage which. Before the agreement the network reached about 98.5 percent of the population. Yet it covered considerably less geographic area than Vodafone or Spark.
The carrier says the move will see an end to national roaming and all customers will “receive the full 2degrees experience”.
Martin Sharrock, 2degrees’ chief technology officer, says; “Using our spectrum in these areas for the first time is like adding a new motorway for our customers to use, they move from sharing our partners’ network to a network dedicated just for 2degrees. This is possible without building new cell towers.”
Infrastructure sharing agreement smart move
It’s a smart move by both companies. Vodafone gets to earn a handy extra revenue stream without undermining its competitive position. Although carriers don’t look at the revenue generated per tower, that extra income means the 200 or so more remote sites will do a better job of earning their keep.
Meanwhile, 2degrees gets to extend its reach without the need for capital expenditure.
Capital is going to be tight. The company will need to build a 5G network. That’s expensive, but majority shareholder Trilogy International Partners is struggling.
In the past 2degrees has used vendor financing from Huawei, its network equipment partner, to expand its coverage. With Huawei locked out from building a 5G network in New Zealand that avenue is also closed.