Telefonica Germany's (NYSE: TEF) latest agreement to get fiber-based backhaul services from its main rival Deutsche Telekom (XETRA: DTE.DE) illustrates the idea that wireless operators need multiple sources for their backhaul needs. In this deployment, Telefonica will rent lines on Telekom's fiber network to connect up to 2,000 points of presence (PoPs).
Beginning in Q2, the wireless operator will be able to aggregate voice and data traffic from the mobile phone masts back to its own wireline network.
Although Telefonica would not provide financial terms of the contract, Telefonica will achieve two main goals: increase the speed and capacity of its German-based mobile network, without having to put up new capital to extend its own wireline network to the region to support ongoing growth of mobile data.
"The agreement with (Deutsche) Telekom gives us the chance to operate cost-efficiently, quickly and flexibly in the rapidly growing market for mobile data," Rene Schuster, chief executive of Telefonica in Germany, said in a statement.
Deutsche Telekom said that it would be open to making similar agreements with other interested wireless operators.
Such a trend is not limited to Germany. In the in the domestic U.S. market where large wireless operators like Verizon Wireless, for example, has had to partner with other regional carriers for wireless backhaul services in markets where it does not have wireline facilities.
- Total Telecom via Dow Jones has this article
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