The partnership will help to boost 5G network development process and optimize each party’s network infrastructure maintenance and development costs. Network sharing will not affect product and services competition – both Tele2 and Bitė Group will continue to operate as completely independent entities. Infrastructure sharing is a common practice globally and in EU, some joint ventures operates as long as 18 years, informs companies in a press release.
The partnership will be implemented by establishing a joint venture. It will start to develop upcoming 5G network and operate existing RAN (which consists of base stations and antennas) infrastructure. Core networks (which consists of switching stations and other critical equipment) will be owned and operated by the companies separately.
Parties expect that joint development of 5G network will be rolled out much faster than in a standalone scenario, which will benefit development of modern economies in Latvia and Lithuania.
Parties have intention to build out radio network gradually during 2021-2023, with the full network targeted to be established by 31 December 2023. Until 2021 only planning and preparation activities will happen.
“This cooperation isn’t just about more efficient infrastructure maintenance and faster development but also about our long-term ambitions - we want all people in Latvia can enjoy the fast and high quality mobile connections. Such practice is well known in many countries as it allows to develop 5G and other modern technologies much faster, more efficiently and on a larger scale. Main winners will be our customers who will have access to the largest mobile network,” – says Petras Masiulis, CEO at Tele2.
The agreement is based on positive experiences from other countries where similar arrangements already exist. Active network sharing is commonplace today, with approx. 100 sharing agreements globally and with 40 sharing agreements only in Europe, e.g. Tele2 and Telenor in Sweden, Orange and T-Mobile in Poland, DNA and Telia in Finland, SFR and Bouyugues Telecom in France, Vodafone and Nova in Iceland.
“Major goal of the partnership is to boost development of 5G based services offered by Bitė and provide mobile TV, faster internet and IoT solutions for customers earlier. Shared RAN will result in better quality of service, larger coverage and better capacity than separate networks could provide. Cooperation will also result in a more efficient use of resources and have a positive environmental impact too”, – says Pranas Kuisys, executive director at Bitė Lietuva.
Telecommunication companies calculate significant increase in effectiveness operating a shared network with improved data throughput of 30–60%. The partnership is also positive for environmental through more efficient use of resources, e.g. by a 20% reduction in electricity usage.
Bitė Group and Tele2 will obtain a 50 percent ownership in the joint venture in Lithuania and Latvia.