Optus, VHA team to tackle Telstra

Dylan Bushell-Embling
04 May 2012

Australia's mobile operator challengers, Optus and VHA, have joined forces to take on incumbent Telstra by expanding their respective network coverage.

Optus - a subsidiary of Singapore's SingTel - and VHA - a joint venture between Vodadone Australia and Hutchison Australia – revealed they have signed an MoU to expand their joint network agreement.

Under the deal, also signed by Vodafone Networks, Optus and Vodafone will be able to share some existing 3G and 4G cell sites, as well as the costs of building and operating 500 new sites. The operators have also agreed to co-locate the majority of their new infrastructure on existing sites.

For at least the next five years, Optus will also become the exclusive roaming partner for VHA customers in some regional areas.

In a statement, Optus said the deal will give the operator's customers access to nearly 1,000 additional mobile sites across Australia. By 2015, the operator expects it to provide a 20% increase in the number of mobile sites across the Optus mobile network.

The Sydney Morning Heraldreported that the deal is expected to save both companies around A$100 million ($102.5 million) each, and potentially allow the operators to roll out cell sites in places where it would otherwise be cost prohibitive.

Both Optus and VHA have long been struggling to keep up with Telstra's aggressive network rollouts. Thanks to its deep pockets, Telstra now has a 3G network reaching 99% of the Australian population, and 4G coverage in areas of a number of cities.

The deal between Optus and VHA could allow the operators to compete on a more equal footing. But because it would involve co-operation between two rival mobile operators, it will require the approval of competition regulator ACCC.

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