Vodafone and Telefonica, O2's parent company, have officially announced plans to join forces across Europe in a bid to cut costs.

The two companies will share network infrastructure in Germany, Spain, Ireland and the UK, with a further possible alliance in the Czech Republic.

In sharing the cost, the companies are hoping to consolidate their existing sites and jointly build new ones, as well as delivering hundreds of millions of pounds in savings over the course of the deal, set to run for 10 years.

Independent

The two companies are also stating that the new move will help curtail the environmental impact of building new sites, although they have both stated that they will continue to manage traffic independently.

This would likely quash any rumours of an imminent merger between two of the biggest operators in the world, although given the financial climate it can't be ruled out in the coming years.

The collaboration will also mean a reduced number of masts being deployed throughout Europe while still improving coverage of 2G and 3G signal. The latter is particularly important as mobile broadband comes to the fore.

The two companies have also stated that "further areas of co-operation are actively being explored on a market by market basis, such as sharing of transmission infrastructure, among others."

We can just see the conversations now: "No, you have the new iPhone." "No, I insist, YOU have it..."