OPTUS AND VODAFONE AUSTRALIA FINALISE AGREEMENT TO ROLL OUT SHARED 3G NETWORK

Optus and Vodafone Australia today signed a binding agreement to form an alliance to share 3G network sites and radio infrastructure across Australia.

Following a heads of agreement announced on 26 August 2004, Optus and Vodafone are the first mobile operators in Australia to finalise an agreement to build and operate a joint national 3G radio network, sharing more than 2,000 base stations nationally.

Allen Lew, Managing Director, Optus Mobile said, "The agreement confirms the commitment of both companies to roll out a shared 3G network.

"By bringing together the resources of the Optus and Vodafone teams, we are able to share the costs of the network enabling us to roll out faster and deliver efficiencies to both our businesses.

"We plan to launch the network in Q3 2005 and have been working together for some time. We have finalised the radio plan - determining what sites are required to deliver the best performance - and have started constructing the network," Mr Lew said.

Grahame Maher, CEO, Vodafone Australia said, "Together we have committed to rolling out a network of 3G sites, initially in Sydney, Melbourne and Canberra followed by Brisbane, Perth, Adelaide and other regions.

"Consumers will benefit from both access to a robust and reliable network and the cost savings provided by Optus and Vodafone combining their resources and sharing their infrastructure. It is a great example of good business practices and leading the industry globally.

"It has also been very important for us to minimise community and environmental impacts, and rather than building new sites, wherever possible re-using existing sites from the combined pool of existing Optus and Vodafone 2G sites," Mr Maher said.

Mr Andrew Smith has been appointed as Chief Operations Officer to lead the newly created joint venture executive team. Mr Smith will be stepping down from his current posit ion of Director, Mobile Networks at Optus.

The agreement to share network infrastructure encompasses both co-located sites and shared network sites. The network installed on shared sites is to be held through an unincorporated joint venture between the parties.

A co-located site is where Optus and Vodafone share a single set of 3G antennas and feeders and co-locate the two carriers' 3G base stations in a single equipment shelter. This type of site will be deployed in the inner areas of Sydney and Melbourne.

Shared network sites use a single set of 3G antennas and feeders and share a 3G base station.

Optus and Vodafone will each own a 50 per cent interest in the assets, have access to 50 per cent of the capacity and share the cost of building and operating the network.

Both parties are currently deploying 3G infrastructure in Sydney, Melbourne and Canberra. Today's announcement has no impact on existing launch plans.

The shared network will be the first in the world to feature Nokia Multi-Operator Radio Access Network (MO-RAN) technology - again, leading the way both regionally and globally.

Optus estimates the cost of independently rolling out 2,000 3G base stations to cover Sydney, Melbourne, Canberra, Brisbane, Perth and Adelaide to be approximately A$435 million. Under the joint venture, Optus estimates its capital expenditure will be reduced by A$100 million in the first three years, compared to a go it alone approach. Operating expenditure for maintenance, operations and site leases will be reduced by approximately A$10 million per year.

This agreement is conditional on Optus and Vodafone obtaining all necessary regulatory approvals and clearances, including from the ACCC.

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